Bill Text: CA SBX12 | 2023-2024 | Regular Session | Enrolled

California Senate Bill 2 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: Energy: transportation fuels: supply and pricing: maximum gross gasoline refining margin.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2023-03-28 - Chaptered by Secretary of State. Chapter 1, Statutes of 2023-24 First Extraordinary Session. [SBX12 Detail]

Download: California-2023-SBX12-Enrolled.html

Enrolled March 27, 2023

Passed IN Senate March 23, 2023

Passed IN Assembly March 27, 2023

Amended IN Senate March 20, 2023

CALIFORNIA LEGISLATURE— 2023–2024 1st Ext.

Senate Bill

No. 2

Introduced by Senator Skinner

December 05, 2022

An act to amend Sections 25354, 25355, 25362, and 25364 of, to add Sections 25354.2, 25355.5, 25355.7, and 25367 to, and to add Chapter 4.6 (commencing with Section 25370) to Division 15 of, the Public Resources Code, relating to energy.

LEGISLATIVE COUNSEL'S DIGEST

SB 2, Skinner. Energy: transportation fuels: supply and pricing: maximum gross gasoline refining margin.

Existing law requires operators of refineries in the state that produce gasoline meeting California specifications, within 30 days of the end of each calendar month, to submit a report to the State Energy Resources Conservation and Development Commission containing certain information regarding its refining activities related to the production of gasoline in that month, including the gross gasoline refining margin of gasoline sold in that month. Existing law requires the commission within 45 days of the end of each calendar month to post certain information on its internet website.

This bill would authorize the commission to set a maximum gross gasoline refining margin, as provided. The bill would require the commission, if the commission establishes the maximum gross gasoline refining margin, to establish a penalty for exceeding the maximum gross gasoline refining margin, as provided. The bill would authorize the commission to petition the court to enjoin a refiner from exceeding the maximum gross gasoline refining margin. The bill would also authorize the commission to impose an administrative civil penalty on a refiner for exceeding the maximum gross gasoline refining margin, as provided. The bill would require the commission to consider a refiner’s request for an exemption from the maximum gross gasoline refining margin, as provided. The bill would require a refiner seeking an exemption to file a statement under the penalty of perjury setting forth the facts that form the basis for the request for exemption. By requiring the statement to be filed under the penalty of perjury, the bill would expand the scope of the crime of perjury, thereby imposing a state-mandated local program. The bill would require the penalties collected to be deposited into the Price Gouging Penalty Fund, which the bill would create in the State Treasury. The bill would require moneys in the fund, upon appropriation by the Legislature, to be used to address any consequences of price gouging on Californians. The bill would require the California State Auditor, no later than March 1, 2033, to complete an audit and performance review of the maximum gross gasoline refining margin and penalty, if set by the commission. The bill would require the California State Auditor to make a determination in a report to the Legislature and the commission, by no later than June 1, 2033, as to whether the maximum gross gasoline refining margin and penalty is achieving the intended goal to reduce gasoline price spikes and stabilize the gasoline fuel supply market. If the California State Auditor concludes that the maximum gross gasoline refining margin and penalty should be terminated, the bill would require the commission, within 180 days after the issuance of the report, to cease implementing the maximum gross gasoline refining margin and penalty, except as provided.

This bill would require the commission, in cooperation with the California Department of Tax and Fee Administration, to submit a report to the Legislature, on or before March 1 of each year, that includes a review of the price of gasoline in California and its impact on state revenues for the previous calendar year, as provided. The bill would authorize the department to request from any person certain records required to be maintained and any records in the person’s possession, custody, or control that the department deems necessary to facilitate the report or to assist the commission.

This bill would require the commission, on or before January 1, 2024, and every 3 years thereafter, to submit an assessment to the Governor and the Legislature that, among other things, identifies methods to ensure a reliable supply of affordable and safe transportation fuels in California, as provided. The bill would require the commission to use reasonable means necessary and available to seek and obtain information from any sources for purposes of preparing the assessment and would authorize the commission to impose a civil penalty if a person fails to timely provide information necessary for preparing the assessment. The bill would require the commission and the State Air Resources Board, on or before December 31, 2024, and taking into account the assessment, to prepare a Transportation Fuels Transition Plan, as provided.

This bill would establish the Division of Petroleum Market Oversight in the commission that is led by a director appointed by the Governor and subject to Senate confirmation. The bill would specify that the division operates with authority independent of the commission’s authority. The bill would specify the duties of the division, including, among other duties, the duty to provide guidance and recommendations to the Governor and the commission on any issues related to transportation fuels pricing and transportation decarbonization in California. The bill would establish the Independent Consumer Fuels Advisory Committee, consisting of specified members, within the commission, and would require the committee to advise the commission and the division.

This bill would require operators of refineries to report additional information, including the net gasoline refining margin per barrel of gasoline sold in that month. The bill would require the commission to post on its internet website certain information related to the net gasoline refining margin.

Existing law requires major oil producers, refiners, marketers, oil transporters, and oil storers to annually submit certain information to the commission, as provided.

This bill would revise and recast the above reporting requirement to, among other things, require pipeline operators and operators of ports through which refined gasoline is imported to annually report their capacities for all pipelines and ports used to transport refined gasoline, require all importers of refined products and renewable fuels via marine vessel to submit reports to the commission, as specified, require nonrefiners that commercially trade in gasoline, gasoline blending components, diesel fuel, or renewable fuel inventory to submit weekly reports to the commission, as provided, require refiners and nonrefiners that consummate spot market transactions to submit a daily report to the commission containing certain information for each transaction occurring in the preceding day, as provided, and require refiners to report maintenance activities, both planned and unplanned, to the commission, as provided.

Existing law subjects a person who fails to provide information to the commission after being notified of the failure to civil penalties in specified amounts.

This bill would increase the amount of civil penalties that may be imposed.

Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES

The people of the State of California do enact as follows:

SECTION 1.

The Legislature finds and declares all of the following:

(a) From August to October of 2022, Californians experienced some of the highest gasoline prices ever recorded in the state, even though the price of crude oil declined, state taxes and fees remained unchanged, and gasoline prices did not increase outside the western United States.

(b) Much of this increase was caused by refiners, which increased the costs and profits they added to the price California consumers paid at the pump, leading to prices that were substantially higher per gallon than average prices in the rest of the United States.

(c) During the third and fourth quarters of 2022, the overlap in timing of planned maintenance at refiners’ facilities resulted in a larger decrease in crude oil processing capacity than would otherwise have occurred if planned maintenance at refiners’ facilities had not coincided.

(d) During this same period of time, refiners allowed gasoline inventory levels to reach decade-low levels, placing an upward pressure on gasoline prices.

(e) This refiner conduct makes clear that greater transparency into and oversight of refinery maintenance schedules and inventory is necessary, to avoid preventable supply shocks in the market for transportation fuels.

(f) Historically, refinery outages and issues have created an opportunity for market participants to take advantage of naturally high prices by manipulating prices to stay higher longer, as evidenced by gasoline prices in California remaining elevated without explanation following a temporary price shock after a refinery explosion in 2015. This further demonstrates the need for greater visibility into the pricing, contracting, and marketing practices of industry participants at all levels of the supply chain, and greater oversight by regulators empowered with the information and investigative tools needed to deter and detect anticompetitive conduct and other behavior that harms California consumers.

(g) Although preventable capacity limitations and inventory shortages played a role in the third quarter of 2022 price increases, they cannot account for all of those increases. Similar factors did not lead to extreme price spikes in prior years, suggesting that the sky-high prices Californians faced from August to October of 2022 were due in significant part to opportunistic price gouging by oil companies.

(h) Indeed, during a 90-day period in 2022, refiners earned a record $63,000,000,000 in profits, with some refiners earning more than tenfold their profits for the same period of time in 2021. Refiners’ annual profits for 2022 also set new record highs.

(i) Fundamental change is necessary to prevent future extreme price spikes and price gouging by oil companies, which are entitled to a reasonable return but are not entitled to reap exorbitant profits at the expense of Californians, many of whom rely on gasoline as an essential commodity or who are impacted by the increased cost of goods and services that results from the gasoline price spikes, even as the state begins to transition away from dependence on the fossil fuels that are destroying our climate.

SEC. 2.

Section 25354 of the Public Resources Code is amended to read:

25354.

(a) Each refiner and major marketer shall submit information each month to the commission in such form and extent as the commission prescribes pursuant to this section. For purposes of this section, the term “refiner” and “refinery” shall include refiners and refineries as defined in Sections 25127 and 25128, and also those persons and facilities that process renewable feedstocks instead of crude oil feedstocks and otherwise meet the definitions in Sections 25127 and 25128. The information shall be submitted within 30 days after the end of each monthly reporting period and shall include the following:

(1) Refiners shall report, by volume, price, and type, for each of their refineries, feedstock inputs, origin of petroleum receipts, imports of finished petroleum products and blendstocks and ethanol, including the source of those imports, exports of finished petroleum products and blendstocks and ethanol, including the destination of those exports and the entity receiving those exports, refinery outputs, refinery stocks, finished product supply and distribution, including all gasoline sold unbranded by the refiner, blender, or importer, and all current inventories of refined and unrefined petroleum products.

(2) Major marketers shall report, by volume, price, and type, on petroleum product receipts and the sources of these receipts, inventories of finished petroleum products and blendstocks and ethanol, distributions through branded and unbranded distribution networks, and exports of finished petroleum products and blendstocks and ethanol from the state.

(b) Each major oil producer, refiner, marketer, oil transporter, oil storer, pipeline operator, or port through which refined gasoline is imported or exported, shall annually submit information to the commission in such form and extent as the commission prescribes pursuant to this section. The information shall be submitted within 30 days after the end of each reporting period, and shall include the following:

(1) Major oil transporters shall report on petroleum by reporting the capacities of each major transportation system, the amount transported by each system, and inventories thereof. The commission may prescribe rules and regulations that exclude pipeline and transportation modes operated entirely on property owned by major oil transporters from the reporting requirements of this section if the data or information is not needed to fulfill the purposes of this chapter. The provision of the information shall not be construed to increase or decrease any authority the Public Utilities Commission may otherwise have.

(2) Major oil storers shall report on storage capacity, inventories, receipts and distributions, and methods of transportation of receipts and distributions.

(3) Major oil producers shall, with respect to thermally enhanced oil recovery operations, report annually by designated oil field, the monthly use, as fuel, of crude oil and natural gas.

(4) Refiners shall report on facility capacity, and utilization and method of transportation of refinery receipts and distributions.

(5) Major oil marketers shall report on facility capacity and methods of transportation of receipts and distributions.

(6) Pipeline operators and port operators shall report their capacities for all pipelines and ports used to transport refined gasoline.

(7) All major oil producers, refiners, marketers, oil transporters, oil storers, pipeline operators, or port operators submitting information under this subdivision shall include in the report for each reporting period the full names of all persons or entities that directly or indirectly own 10 percent or more of the major oil producer, refiner, marketer, oil transporter, oil storer, pipeline operator, or port operator submitting the information.

(c) Each person required to report pursuant to subdivision (a) shall submit a projection each month of the information to be submitted pursuant to subdivision (a) for the quarter following the month in which the information is submitted to the commission.

(d) In addition to the data required under subdivision (a), each integrated oil refiner that produces, refines, transports, and markets in interstate commerce and that supplies more than 500 branded retail outlets in California shall submit to the commission an annual industry forecast for Petroleum Administration for Defense, District V, covering Arizona, Nevada, Washington, Oregon, California, Alaska, and Hawaii. The forecast shall include the information to be submitted under subdivision (a), and shall be submitted by March 15 of each year. The commission may require California-specific forecasts only if the commission finds them necessary to carry out its responsibilities.

(e) The commission may by order or regulation modify the reporting period as to any individual item of information setting forth in the order or regulation its reason for so doing.

(f) (1) Destination facilities shall submit to the commission, by deadlines set by the commission, the following information regarding crude oil transported to or within California via rail car or marine vessel:

(A) The route of transport within California.

(B) The marketable crude oil name.

(C) The loading facility, including the loading facility name, and the latitude, longitude, and state where the facility is located.

(D) The name of the destination facility, the type of facility, and the latitude and longitude where the facility is located.

(E) Whether the crude oil is nonfloating oil, as defined in Section 8670.3 of the Government Code.

(2) The commission shall quarterly prepare and make available to the public a report based on the data collected pursuant to paragraph (1) that shall include, at a minimum, the routes of transport of crude oil within California, the types of crude oil transported over each of those routes, and the frequency with which nonfloating oil has been transported over each of those routes during the reporting period. The commission shall aggregate information used in a report prepared under this paragraph to the extent necessary to assure confidentiality if public disclosure of the specific information or data would result in unfair competitive disadvantage to the person supplying the information or would adversely affect market competition.

(3) The commission may require additional information to be submitted as necessary to perform its responsibilities under this chapter.

(g) Any person required to submit information or data under this chapter, in lieu thereof, may submit a report made to any other governmental agency, if:

(1) The alternate report or reports contain all of the information or data required by this chapter.

(2) The person clearly identifies the specific provision of this chapter to which the alternate report is responsive.

(h) Each refiner shall submit to the commission, within 30 days after the end of each monthly reporting period, all of the following information in such form and extent as the commission prescribes:

(1) Monthly California weighted average prices and sales volumes of finished leaded regular, unleaded regular, and premium motor gasoline sold through company-operated retail outlets, to other end-users, and to wholesale customers.

(2) Monthly California weighted average prices and sales volumes for residential sales, commercial and institutional sales, industrial sales, sales through company-operated retail outlets, sales to other end-users, and wholesale sales of No. 2 diesel fuel, No. 2 fuel oil, and any renewable fuels.

(3) Monthly California weighted average prices and sales volumes for retail sales and wholesale sales of No. 1 distillate, kerosene, finished aviation gasoline, kerosene-type jet fuel, No. 4 fuel oil, residual fuel oil with 1 percent or less sulfur, residual fuel oil with greater than 1 percent sulfur, and consumer grade propane.

(i) (1) Beginning the first week after January 1, 2004, and each week thereafter, an oil refiner, oil producer, petroleum product transporter, petroleum product marketer, petroleum product pipeline operator, and terminal operator, as designated by the commission, shall submit a report in the form and extent as the commission prescribes pursuant to this section. The commission may determine the form and extent necessary by order or by regulation.

(2) A report may include any of the following information:

(A) Receipts and inventory levels of crude oil and petroleum products at each refinery and terminal location.

(B) Amount of gasoline, diesel, jet fuel, blending components, and other petroleum products imported and exported.

(C) Amount of gasoline, diesel, jet fuel, blending components, and other petroleum products transported intrastate by marine vessel.

(D) Amount of crude oil imported, including information identifying the source of the crude oil.

(E) The regional average of invoiced retailer buying price. This subparagraph does not either preclude or augment the current authority of the commission to collect additional data under paragraph (3) of subdivision (f).

(F) Copies of all contracts or agreements entered into, or amendments to contracts or agreements, with other oil refiners, oil producers, petroleum product transporters, petroleum product marketers, petroleum product pipeline operators, terminal operators, or any other entity that trades in petroleum products whether or not those entities take possession of petroleum products, as designated by the commission, during the monthly reporting period, along with records of every transaction made under those contracts or agreements and the prices charged for those transactions.

(3) This subdivision is intended to clarify the commission’s existing authority under subdivision (f) to collect specific information. This subdivision neither precludes nor augments the existing authority of the commission to collect information.

(j) All importers of refined products and renewable fuels via marine vessel shall report to the commission, at least 96 hours before the arrival of a marine vessel delivery to California, all of the following information:

(1) The name of the product tanker or name of the barge, including associated tug name.

(2) The loading location or locations for cargo.

(3) The volume by each type of transportation fuel, such as gasoline, gasoline blending components, diesel fuel, renewable diesel fuel, jet fuel, sustainable aviation fuel, biodiesel, and ethanol.

(4) The cargo landed cost, including the cost incurred to purchase, load, transport, and all other costs and fees to deliver, each type of transportation fuel, such as gasoline, gasoline blending components, diesel fuel, renewable diesel fuel, jet fuel, sustainable aviation fuel, biodiesel, and ethanol.

(5) The status of any transportation fuel as sold before discharge, the identity of the buyer for any presold product, and the sale price of any presold product.

(6) The planned discharge location, such as the marine berth designation, or locations.

(7) The foreign, domestic, and intrastate marine movements of the vessel from the port of origin to the port of delivery of the cargo.

(k) Nonrefiners, such as proprietary storage companies, that commercially trade in gasoline, gasoline blending components, diesel fuel, or renewable diesel fuel inventory not subject to contractual supply obligations, shall submit weekly reports to the commission, starting 30 days after the effective date of the act adding this subdivision, that include the weekly inventory volume, by type, such as gasoline, gasoline blending components, diesel fuel, or renewable fuels, for each position holder by name of company, and copies of all contracts or agreements entered into with any refiners, oil producers, petroleum product transporters, petroleum product marketers, petroleum product pipeline operators, terminal operators, or any other entity that trades in petroleum products whether or not those entities take possession of those products, as designated by the commission.

(l) Refiners and nonrefiners that consummate spot market transactions shall submit a daily report to the commission, starting 30 days after the effective date of the act adding this subdivision, that includes all of the following information for each transaction occurring during the preceding day:

(1) The identity of the spot market where the transaction occurred.

(2) Whether the transaction was reported to the Oil Price Information Service (OPIS), or any other price reporting service, and the time of the reporting.

(3) The date of the transaction.

(4) The time of the transaction.

(5) The contract identification number for the transaction.

(6) The position sequence number for the transaction.

(7) The contract position identification number for the transaction.

(8) The name, or nonanonymized identification of the executing trader for the transaction.

(9) The counterparty for the transaction, including company name and name or nonanonymized identification of the executing trader.

(10) Whether the reporting entity is the seller or buyer.

(11) The broker, including company name and name or nonanonymized identification of the executing broker.

(12) The type of refined transportation fuel, such as gasoline, diesel, or jet fuel.

(13) The product name for each type of refined transportation fuel.

(14) The volume of each transaction in thousands of barrels, or specified unit of measurement if unable to be indicated in thousands of barrels.

(15) The invoiced volume of each transaction in thousands of barrels, or specified unit of measurement if unable to be indicated in thousands of barrels.

(16) The time and date the material that is the subject of the transaction is scheduled to be delivered or was delivered.

(17) The delivery location specified in the contract for the transaction and the actual delivery location.

(18) The method of transportation for the delivery, such as pipeline, marine vessel, or truck, and the name of the transport.

(19) The actual title transfer date.

(20) The contract subcycle, including descriptors such as “Any,” “L3,” “FH,” “BH,” “C1,” “C2,” “C3,” or “C4.”

(21) The type of pricing method, including exchange of futures for physical (EFP), fixed price, fixed date range, floating date range, reference formula, OPIS close, event-related date range, such as three days on and around delivery or discharge, or any other utilized method of pricing.

(22) The contract price formula, including the differential from any contract formula and the unit of measurement for any price differential.

(23) The pricing start and end dates for each contract.

(24) The price value of the contract.

(25) For EFP contracts, the name of the futures product, the contract month of the futures product expressed as the two-digit month and the two-digit year (MM-YY), and the price value of the futures product.

(m) It is the intent of the Legislature that all refiners shall, while protecting the health and safety of the public and employees, schedule planned maintenance and turnaround in a manner that ensures minimum levels of transportation fuels in production or reserves necessary to prevent supply shortages or price spikes. To advance that purpose, refiners shall report maintenance activities for each refinery to the commission as follows:

(1) Notwithstanding any other law, a refiner shall notify the executive director of the commission of all plans to undertake turnaround and planned maintenance. A refiner’s notification shall include, at a minimum, all of the following information:

(A) A brief description of planned work.

(B) The scheduled start date.

(D) The individual process units involved.

(E) The name and operational capacity of each process unit.

(F) The estimated daily decrease in output of material or substance produced by the unit, such as gasoline, diesel, or jet fuel components.

(G) The projected quantity of contractual supply obligations for finished gasoline due during the planned maintenance event or turnaround.

(H) The drawdown of inventory levels of gasoline and gasoline blending components and other material or substance produced by the unit that are controlled by the refiner at the refinery and at other storage locations in California during the planned maintenance event or turnaround, the current levels of such inventories at the time notice is provided, and the anticipant levels of such inventories immediately before the commencement of the planned maintenance event or turnaround.

(I) Imports of gasoline and gasoline blend components and other material or substance produced by the unit in preparation for or during the planned maintenance event.

(J) Planned purchases of gasoline and gasoline blending components and other material or substance produced by the unit from other market participants in California related to the planned maintenance event.

(K) Planned reductions of noncontracted sales of gasoline or other material or substance produced by the unit related to the planned maintenance event.

(2) The refiner’s notification shall be submitted to the executive director of the commission at least 120 days before the planned maintenance or turnaround.

(3) Before submitting its turnaround schedule notification to the Division of Occupational Safety and Health pursuant to Section 7872 of the Labor Code, each refiner shall submit its turnaround schedule to the executive director of the commission. When submitting its schedule to the division, each refiner shall indicate that, for each scheduled turnaround, the notification to the commission was submitted.

(4) For unplanned maintenance resulting in a shutdown of a refinery process of greater than 24 hours, submit initial and final reports as follows:

(A) The initial report, due within 48 hours of the initial outage, shall include all of the following information:

(i) The name and operational capacity of each process unit involved in the unplanned outage.

(ii) The initial estimated daily decrease in output of gasoline, diesel, and jet fuel components from each process unit affected by the unplanned outage.

(iii) The current inventory levels of the material or substance produced by the unit affected by the unplanned outage that are controlled by the refiner at the refinery and at other storage locations in California during the unplanned maintenance event.

(iv) A description of the reason for the unplanned maintenance or outage.

(v) The projected duration of production reduction.

(B) The final report, due within 48 hours of the completion of repairs, shall include all of the following information:

(i) The return-to-service date.

(ii) The total decreased output of gasoline, diesel, and jet fuel components from each of the affected process units.

(iii) The total increased output from other process units by type of refined product to partially compensate for the reduced output from the process units affected by the unplanned outage.

(iv) The amount of material obtained from other sources that compensated for the decrease described in clause (ii) and enabled the refiner to cover for the loss of that production.

(v) The drawdown of inventory levels of any material or substance produced by the unit that are controlled by the refiner at the refinery and at other storage locations in California during the unplanned maintenance event.

(5) Upon receipt of a notification under this subdivision, the executive director of the commission shall review the notification and may request any additional information from the refiner that is necessary for the commission to assess the potential effect of the planned maintenance event on the supply and prices of transportation fuels in the state.

(n) (1) Notwithstanding any other law, information in the notification provided to the commission by a refiner providing a notice or report of its planned maintenance, unplanned maintenance, or turnaround schedule, including notifications under subdivision (m) shall be considered confidential information not subject to public disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). The commission may share the information with other state agencies, including the Attorney General, only if the other state agency agrees to maintain the confidentiality of the information.

(2) The commission may adopt guidelines to prescribe the manner in which the executive director of the commission shall implement subdivision (m) at a commission business meeting. The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any regulations, guidelines, or other standards adopted by the commission pursuant to this paragraph.

(o) Refiners shall report annually to the commission their planned production levels and schedule for turnarounds and planned maintenance for the following 12 months, by month and by finished product.

(p) (1) The operator of any refinery in this state shall report to the Commission at least 12 months in advance if that refinery operator intends to permanently shut down, shut down to reconfigure, or sell a refinery in a transaction that may result in a refinery shutting down or reconfiguring.

(2) Upon receipt of a notice pursuant to paragraph (1), the commission shall notify the Legislature in a manner that does not disclose confidential information, if applicable.

(3) After the completion of the report by the commission required by Section 25371 and its submission to the Legislature, the commission may modify the notice required under this subdivision. The commission shall not reduce the notice period to less than 12 months.

SEC. 3.

Section 25354.2 is added to the Public Resources Code, to read:

25354.2.

The commission, in consultation with the Labor and Workforce Development Agency and labor and industry stakeholders, shall consider ways to manage necessary refinery turnarounds and maintenance that would protect the health and safety of employees and the public, and minimize the impact of maintenance-related production losses on fuel prices. The commission may, by regulation, impose requirements governing the timing of turnaround and maintenance developed through consultations under this section.

SEC. 4.

Section 25355 of the Public Resources Code is amended to read:

25355.

(a) For purposes of this section, the following definitions apply:

(1) “Gross gasoline refining margin” means the difference, expressed in dollars per barrel, between the volume-weighted average price of wholesale gasoline sold by a refiner in the state and the average price of crude oil received by the refinery.

(2) “Net gasoline refining margin” means the gross gasoline refining margin minus the refinery’s operational costs.

(3) “Operational costs” means costs, expressed in dollars per barrel, necessarily incurred by the operator of a refinery in the state to produce gasoline meeting California specifications, including, but not limited to, costs of labor, electricity, natural gas, chemicals, maintenance, hydrogen, and other intermediate oil products, federal renewable identification numbers, obligation costs, capital investments, logistics costs, and additive costs.

(b) Within 30 days of the end of each calendar month, the operator of each refinery operating in the state that produces gasoline meeting California specifications shall submit to the commission a report for the refinery containing all of the following information:

(1) The volume, in barrels, of crude oil received in that month, separated into domestic and foreign subtotals.

(2) The volume-weighted average crude oil acquisition cost paid for crude oil that is received and intended to be refined during that month, separated into domestic and foreign crude oil acquisition costs.

(3) The volume in barrels of refined gasoline received or imported in that month from entities other than the refiner.

(4) The volume-weighted average cost of any refined gasoline received or imported by a refiner during that month.

(5) The quantity, in barrels, of wholesale gasoline meeting California specifications sold and the corresponding volume-weighted average prices, less all applicable local, state, and federal taxes, separated by unbranded rack sales, branded rack sales, bulk sales, spot pipeline sales, and dealer tankwagon (DTW) sales in that month.

(6) Separate quantification of the volume-weighted fees or estimated valuations of costs embedded in all wholesale gasoline sales associated with the low-carbon fuel standard (LCFS) and associated with the cap and trade cap-at-the-rack (CAR) program, for each volume-weighted average price for: (A) unbranded rack sales, (B) branded rack sales, (C) bulk sales, (D) spot pipeline sales, and (E) DTW sales, in that month.

(7) The gross gasoline refining margin per barrel of gasoline sold in that month.

(8) The operational costs per barrel of gasoline sold in that month, including a complete description and amount of each category of cost identified in paragraph (3) of subdivision (a) and any other category of cost.

(9) The net gasoline refining margin per barrel of gasoline sold in that month.

(c) Within 45 days of the end of each calendar month, the commission shall post on its internet website all of the following:

(1) The gross gasoline refining margin data reported pursuant to this section for that month, and any gross gasoline refining margin independently calculated by the commission, as a volume-weighted gross refining margin in aggregate for all the combined refineries in the state.

(2) The gross gasoline refining margin data reported for that month, and any gross gasoline refining margin independently calculated by the commission, in aggregate for each refiner with more than one refinery operating within California.

(3) The net gasoline refining margin data reported pursuant to this section for that month, and any net gasoline refining margin independently calculated by the commission, as a volume-weighted net refining margin in aggregate for all the combined refineries in the state.

(4) The net gasoline refining margin data reported for that month, and any net gasoline refining margin independently calculated by the commission, in aggregate for each refiner with more than one refinery operating within the state.

(5) The aggregated data submitted pursuant to paragraphs (1) through (4), inclusive, of subdivision (b) for that month.

SEC. 5.

Section 25355.5 is added to the Public Resources Code, to read:

25355.5.

(a) For purposes of this section, the following definitions apply:

(1) “Gross gasoline refining margin excluding state program costs” means the amount, expressed in dollars per barrel and calculated by the commission on a monthly basis, equal to the volume-weighted average rack price of wholesale gasoline sold by a refiner in the state, less the volume-weighted fees or estimated valuations of costs embedded in all of the refiner’s wholesale gasoline sales associated with the low carbon fuel standard and the cap and trade cap-at-the-rack program, less the refiner’s volume-weighted average acquisition cost.

(2) “Maximum gross gasoline refining margin” means the maximum amount of gross gasoline refining margin excluding state program costs established under subdivision (b).

(3) “Volume-weighted average acquisition cost” means the combined volume-weighted average of the refiner’s volume-weighted average crude oil acquisition cost and the refiner’s volume-weighted cost of acquiring refined gasoline imported to California or received from an entity other than the refiner.

(4) “Volume-weighted average rack price of wholesale gasoline” means the combined volume-weighted average of the refiner’s rack price of the branded and unbranded rack sales reported under paragraph (5) of subdivision (b) of Section 25355.

(5) “Volume-weighted average crude oil acquisition cost” means the amount reported as required by paragraph (2) of subdivision (b) of Section 25355.

(b) The commission may, by regulation or order at a business meeting, subject to the requirements of subdivision (f), set a maximum gross gasoline refining margin.

(c) (1) If the commission sets a maximum gross gasoline refining margin under subdivision (b), it shall also establish a penalty for exceeding that maximum margin, by regulation or order at a business meeting, subject to the requirements of subdivision (f), that may be the same meeting described in subdivision (b).

(2) The penalty shall be a percentage of the amount by which the refiner’s gross gasoline refining margin excluding state program costs exceeds the maximum gross gasoline refining margin, converted from dollars per barrel to dollars per gallon, multiplied by the number of gallons sold by the refiner during the calendar month for all transactions described in paragraph (6) of subdivision (b) of Section 25355.

(3) Subject to subdivision (j), the penalty shall be tiered, such that the penalty percentage shall increase with the amount by which the refiner’s gross gasoline refining margin excluding state program costs exceeds the maximum gross gasoline refining margin, as follows:

(A) Amounts earned by a refiner that exceed the maximum gross gasoline refining margin by less than ten cents ($0.10) per gallon shall be subject to the base penalty percentage set by the commission.

(B) Amounts earned by a refiner that exceed the maximum gross gasoline refining margin between by more than ten cents ($0.10) and less than or equal to twenty cents ($0.20) per gallon shall be subject to a penalty percentage higher than the base penalty percentage.

(C) Amounts earned by a refiner that exceed the maximum gross gasoline refining margin by more than twenty cents ($0.20) per gallon shall be subject to a penalty percentage higher than the penalty percentage set under subparagraph (B).

(d) In establishing a maximum gross gasoline refining margin and penalty, the commission shall consider information reported under subdivision (b) of Section 25355 and any other public data and reports that it determines will assist its analysis. The commission shall also consider confidential information submitted pursuant to Sections 25354 and 25355. A refiner may submit additional information and facts for the commission to consider under an application for confidential designation pursuant to Section 25364.

(e) The commission shall not set a maximum gross gasoline refining margin or accompanying penalty under subdivisions (b) and (c), respectively, unless it finds that the likely benefits to consumers outweigh the potential costs to consumers. In making that determination, the commission shall consider all factors that in its discretion it deems relevant, including at a minimum all of the following factors, although no one factor shall be determinative:

(1) Whether it is likely that the maximum gross gasoline refining margin and penalty will lead to a greater imbalance between supply and demand in the California transportation fuels market than would exist without the maximum margin and penalty.

(2) Whether it is likely that the maximum gross gasoline refining margin and penalty will lead to higher average prices at the pump on an annual basis than would exist without the maximum margin and penalty.

(3) Whether case-by-case exemptions from the gross gasoline refining maximum margin will be sufficient to ensure that individual refiners have an opportunity to demonstrate the need for a greater margin before they make decisions about production.

(f) Decisions of the commission under subdivision (b) to adopt a regulation or order setting a maximum gross gasoline refining margin, under subdivision (c) to adopt a regulation or order establishing a penalty for exceeding the maximum gross gasoline refining margin, under subdivision (e) regarding the benefits and costs to consumers, and under subdivision (k) regarding adjustments to, or rescission of, the maximum gross gasoline refining margin or penalty, shall be made in accordance with all of the following procedures:

(1) A notice and draft decision, regulation, or order shall be posted publicly at least 30 days before the business meeting at which adoption of the decision, regulation, or order will be considered.

(2) The commission shall receive written comments on the draft decision, regulation, or order.

(3) The commission shall hear public comment on the draft decision, regulation, or order at its business meeting.

(g) If the commission has set a maximum gross gasoline refining margin and penalty, the margin and penalty shall take effect 60 days following the commission’s regulation or order establishing the margin and penalty pursuant to subdivisions (b) and (c), respectively. Within 15 days of the regulation or order establishing a maximum gross gasoline refining margin and penalty, the commission shall notify refiners by a means determined by the commission that may include, but is not limited to, mail, email, or internet website posting.

(h) If the commission has set a maximum gross gasoline refining margin under subdivision (b), it shall be a violation of this section for a refiner to exceed the maximum gross gasoline refining margin.

(i) In addition to any other remedy that may be available, the commission may petition a court to enjoin a refiner from violating this section.

(j) The commission may impose an administrative civil penalty for a violation of this section in the amounts established pursuant to subdivision (c).

(k) The commission may, by regulation or order, at a business meeting, subject to the requirements of subdivision (f), rescind or adjust the maximum gross gasoline refining margin and the penalty percentages and amounts specified in subdivisions (b) and (c) to ensure that a sufficient, affordable, and fairly priced supply of gasoline is available to Californians. A refiner may submit information and facts for the commission to consider in support of any rescission or adjustment under an application for confidential designation pursuant to Section 25364. Rescission of, or adjustments to, the maximum gross gasoline refining margin and the penalty percentages and amounts specified in subdivisions (b) and (c), respectively, pursuant to this subdivision shall be effective on the first day of the calendar month at least 15 days after the commission gives public notice of the rescission or adjustment, unless the commission orders otherwise.

(l) Notwithstanding Section 25901 and except as provided in subdivision (n), a petition for writ of mandate pursuant to Section 1085 of the Code of Civil Procedure shall be the exclusive remedy available to challenge any regulation, order, decision, rule, guideline, or adjudication of an exemption request adopted by the commission under this section. The court’s review shall be limited exclusively to the record before the commission. Any petition shall be filed within 30 days of the commission’s decision.

(m) (1) The commission shall consider a refiner’s request for an exemption from the maximum gross gasoline refining margin and shall grant the exemption upon a showing by the refiner, based on competent and reliable evidence and subject to the commission’s review, examination, and investigation of the evidence, that an application of the maximum gross gasoline refining margin would be unconstitutional as applied to the refiner. The commission may, in its discretion, grant a request for an exemption upon a showing by the refiner of good cause for an exemption, subject to alternative maximum margins or other conditions as the commission may set.

(2) Any refiner seeking an exemption shall, at a minimum, file a statement with the commission, signed under penalty of perjury, setting forth the facts that form the basis for the request for exemption. A refiner may submit information and facts under an application for confidential designation pursuant to Section 25364 to support its application for an exemption.

(n) (1) Before imposing the administrative civil penalty under subdivision (j), the executive director of the commission shall issue and serve a complaint on the refiner, and the commission shall hold a hearing, adopt a decision, and require payment of the penalty in accordance with the procedures described in subdivisions (a) to (d), inclusive, of Section 25534.1.

(2) Judicial review and enforcement of an order imposing an administrative civil penalty under subdivision (j) may be had in accordance with the procedures described in subdivisions (a) and (b) of Section 25534.2.

(3) Penalties collected under this section shall be deposited into the Price Gouging Penalty Fund, which is hereby created in the State Treasury and shall be used, upon appropriation by the Legislature, to address any consequences of price gouging on Californians.

(4) The commission shall make public, on a quarterly basis, the name and address of each refiner that has exceeded the maximum gross gasoline refining margin for any month during the previous quarter, and the amount of administrative civil penalty to be assessed.

(o) The Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) does not apply to any regulation, order, decision, rule, guideline, adjudication of an exemption request, or adjustment of the maximum gross gasoline margin, adopted by the commission under this section.

(p) The California State Auditor shall begin, no earlier than January 1, 2032, and complete, no later than March 1, 2033, an audit and performance review of the maximum gross gasoline refining margin and penalty set pursuant to this section, if the commission has set a maximum gross gasoline refining margin and penalty. The California State Auditor shall make determinations in a report to the Legislature and the commission, by no later than June 1, 2033, as to whether this section is achieving the intended goal to reduce gasoline price spikes and stabilize the gasoline fuel supply market for California consumers. Within 60 days of the issuance of the report, the commission shall hear from the California State Auditor at a business meeting of the commission. If the California State Auditor concludes that the maximum gross gasoline refining margin and penalty should be terminated, then the commission shall cease implementing the maximum gross gasoline refining margin and penalty provisions no later than 180 days after the issuance of the report, unless the Legislature has enacted subsequent legislation to extend the maximum gross gasoline refining margin and penalty provisions in the meantime.

SEC. 6.

Section 25355.7 is added to the Public Resources Code, to read:

25355.7.

(a) Notwithstanding Section 10231.5 of the Government Code, on or before March 1, 2024, and March 1 of each year thereafter, the commission, in cooperation with the California Department of Tax and Fee Administration, shall submit a report to the Legislature, in accordance with Section 9795 of the Government Code, that includes a review of the price of gasoline in California and its impact on state revenues for the previous calendar year.

(b) (1) (A) To facilitate the report required in subdivision (a) and to assist the commission in providing independent analysis and oversight of the market for transportation fuels, and in identifying potential market design flaws and market power abuses, the California Department of Tax and Fee Administration may, notwithstanding any other law, use any information that comes into its possession and may request from any person records required to be maintained pursuant to Section 7053 or 8301 of the Revenue and Taxation Code or any other records in a person’s possession, custody, or control that the California Department of Tax and Fee Administration deems necessary for these purposes. Records that the California Department of Tax and Fee Administration may request, include, but are not limited to, sales prices and contracts for unbranded rack sales, branded rack sales, bulk sales, spot pipeline sales, dealer tankwagon sales, imported fuel transactions, and retail sales of gasoline meeting California specifications, including prices per gallon of gasoline charged by retailers by retail location and by grade of gasoline.

(B) Except as provided in paragraph (4), the information, including, but not limited to, business affairs or trade secrets, provided to the California Department of Tax and Fee Administration pursuant to this section shall constitute confidential information for purposes of Section 7056 of the Revenue and Taxation Code or Section 15570.84 of the Government Code and shall not be subject to public disclosure.

(2) (A) The records requested pursuant to paragraph (1) shall be provided in the form and manner specified by the California Department of Tax and Fee Administration within 30 days of the notice of request.

(B) The California Department of Tax and Fee Administration shall provide written notification to the commission within 10 days after the failure or refusal of any person to provide information or records in the time and manner as specified pursuant to subparagraph (A).

(3) For purposes of the report required by subdivision (a), the commission may impose a civil penalty after receiving notification from the California Department of Tax and Fee Administration that a person has failed or refused to provide information or records in the time and manner as required. A civil penalty under this subdivision shall be imposed under the procedures set forth in subdivision (a) of Section 25362, except that the maximum penalty amount shall be ten thousand dollars ($10,000) per day.

(4) (A) Notwithstanding any other law, the California Department of Tax and Fee Administration may provide any information provided to it by any person pursuant to this subdivision to the commission, to the Attorney General, to any contractor retained to prepare reports required by this section, or any entity that the California Department of Tax and Fee Administration may contract with for the purpose of preparing the reports required by this section. The Attorney General may request from the commission or the California Department of Tax and Fee Administration any information collected pursuant to Section 25354 or 25355 or this section, or Chapter 4.6 (commencing with Section 25730).

(B) Except as provided in subdivision (c), the information, including, but not limited to, business affairs or trade secrets, provided pursuant to this paragraph shall be confidential and shall not be subject to public disclosure by the commission, the Attorney General, any contractor retained to prepare the reports required by this section, or the California Department of Tax and Fee Administration or its contractors.

(c) Notwithstanding any other law, the reports required by this section shall only disclose confidential taxpayer information presented in aggregate form to the extent necessary to ensure confidentiality if public disclosure of the specific information or data would result in unfair competitive disadvantage to the person supplying the information or would adversely affect market competition.

SEC. 7.

Section 25362 of the Public Resources Code is amended to read:

25362.

(a) The commission shall notify those persons who have failed to timely provide the information specified in Section 25354 or 25355. If, within five days after being notified of the failure to provide the specified information, the person fails to supply the specified information, the person shall be subject to a civil penalty of not less than five thousand dollars ($5,000) nor more than twenty thousand dollars ($20,000) per day for each day the submission of information is refused or delayed, up to a maximum penalty of five hundred thousand dollars ($500,000) per submission.

(b) A person who willfully makes any false statement, representation, or certification in any record, report, plan, or other document filed with the commission shall be subject to a civil penalty not to exceed forty thousand dollars ($40,000).

(c) The administration of civil penalties under this section shall be subject to the procedures provided in Section 25534.1, and to the procedures for judicial review under Section 25534.2.

(d) In addition to any civil penalty provided for by this section, if a person fails to timely provide the information specified in Section 25354 or 25355, the commission may petition a court for an order compelling the person to provide that information.

(e) For purposes of this section, the term “person” shall mean, in addition to the definition contained in Section 25116, any responsible corporate officer.

SEC. 8.

Section 25364 of the Public Resources Code is amended to read:

25364.

(a) A person required to present information to the commission pursuant to Section 25354 or 25355 or a person making a request for exemption pursuant to Section 25355.5 may request that specific information be held in confidence. Information requested to be held in confidence shall be presumed to be confidential.

(b) Information presented to the commission pursuant to Section 25354, 25355, or 25355.5 shall be held in confidence by the commission or aggregated to the extent necessary to ensure confidentiality if public disclosure of the specific information or data would result in unfair competitive disadvantage to the person supplying the information or would adversely affect market competition.

(c) (1) Whenever the commission receives a request to publicly disclose unaggregated information, or otherwise proposes to publicly disclose information submitted pursuant to Section 25354, 25355, or 25355.5, notice of the request or proposal shall be provided to the person submitting the information. The notice shall indicate the form in which the information is to be released. Upon receipt of notice, the person submitting the information shall have 10 working days in which to respond to the notice to justify the claim of confidentiality on each specific item of information covered by the notice on the basis that public disclosure of the specific information would result in unfair competitive disadvantage to the person supplying the information or would adversely affect market competition.

(2) The commission shall consider the respondent’s submittal in determining whether to publicly disclose the information submitted to it to which a claim of confidentiality is made. The commission shall issue a written decision which sets forth its reasons for making the determination whether each item of information for which a claim of confidentiality is made shall remain confidential or shall be publicly disclosed.

(d) The commission shall not make public disclosure of information submitted to it pursuant to Section 25354, 25355, or 25355.5 within 10 working days after the commission has issued its written decision required in this section.

(e) No information submitted to the commission pursuant to Section 25354, 25355, or 25355.5 shall be deemed confidential if the person submitting the information or data has made it public.

(f) With respect to petroleum products and blendstocks reported by type pursuant to paragraph (1) or (2) of subdivision (a) of Section 25354, information provided pursuant to subdivision (h) or (i) of Section 25354, and information provided under Section 25355, neither the commission, the State Air Resources Board, or the Attorney General, nor any employee or contractor of those entities, may do any of the following:

(1) Use the information furnished under paragraph (1) or (2) of subdivision (a) of Section 25354, under subdivision (h) or (i) of Section 25354, or under Section 25355 for any purpose other than law enforcement or the statistical purposes for which it is supplied.

(2) Make any publication whereby the information furnished by any particular establishment or individual under paragraph (1) or (2) of subdivision (a) of Section 25354, under subdivision (h) or (i) of Section 25354, or under Section 25355 can be identified.

(3) Permit anyone other than commission members, the State Air Resources Board, the Attorney General, and employees or contractors of those entities to examine the individual reports provided under paragraph (1) or (2) of subdivision (a) of Section 25354, under subdivision (h) or (i) of Section 25354, or under Section 25355.

(g) Notwithstanding any other law, the commission may disclose confidential information received pursuant to subdivision (a) of Section 25304, or Section 25354 or 25355 to the State Air Resources Board or the Attorney General if the state board or the Attorney General agrees to keep the information confidential. With respect to the information it receives, the state board and the Attorney General shall be subject to all pertinent provisions of this section.

(h) (1) Notwithstanding any other law, the commission shall, upon request, timely disclose confidential information received pursuant to subdivision (a) of Section 25304, or Section 25354 or 25355 to the Speaker of the Assembly, the Senate Committee on Rules, the appropriate policy committees in the Assembly or the Senate, or staff members of each, provided that the information shall be provided only in aggregated or otherwise anonymized form, and each individual person receiving or having access to the information shall first agree, in writing, to keep the information confidential. Any person or committee receiving information under this subdivision shall be subject to all pertinent provisions of this section.

(2) Aggregated or otherwise anonymized information disclosed under paragraph (1) shall be made available by the commission to the public no more than quarterly, upon request of the Speaker of the Assembly, the Senate Committee on Rules, or the appropriate policy committees in the Assembly or the Senate, under conditions as the commission may determine are necessary to ensure that public disclosure of the specific information would not result in unfair competitive disadvantage to the person supplying the information or adversely affect market competition.

(i) Notwithstanding any other law, the commission may disclose confidential information received pursuant to paragraph (1) of subdivision (f) of Section 25354 to the administrator for oil spill response, appointed pursuant to Section 8670.4 of the Government Code, upon request for oil spill planning and preparedness purposes, and to first responders in the event of an accident or spill. Information disclosed to the administrator or first responders pursuant to this subdivision that has been identified as confidential under subdivision (a) shall not be disclosed to any other entity except pursuant to a request in accordance with the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code). Upon receipt of a records request seeking information disclosed pursuant to this subdivision, the administrator or first responder receiving the request shall provide the destination facility who provided the confidential information to the commission with an opportunity to submit, within a reasonable time, a response and information in support of exemption from disclosure before making the determination whether the requested records are exempt from disclosure. No requirement or deadline contained in the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code) shall be extended or waived as a result of this subdivision.

(i) This section does not apply to aggregate data that are required to be posted on the commission’s internet website pursuant to subdivision (c) of Section 25355.

SEC. 9.

Section 25367 is added to the Public Resources Code, to read:

25367.

(a) Except as otherwise provided, the adoption of, or amendment to, regulations or orders implementing this chapter shall be considered by the Office of Administrative Law as an emergency, and necessary for the immediate preservation of the public peace, health, safety, and general welfare. Notwithstanding any other law, the emergency regulations or orders adopted to implement this chapter shall remain in effect for two years. Although the commission may adopt regulations to further define terms or prescribe reporting procedures or calculation methodologies pursuant to this chapter, or prescribe any other method of implementing this chapter, the provisions of this chapter are self-executing and shall not require any implementing regulation to be effective.

(b) The commission may enter into contracts to implement this chapter, and the contracts shall not require the review, consent, or approval of the Department of General Services or any other state department or agency and do not need to comply with requirements under the State Contracting Manual or the Public Contract Code.

SEC. 10.

Chapter 4.6 (commencing with Section 25370) is added to Division 15 of the Public Resources Code, to read:

CHAPTER 4.6. Petroleum Market

Article 1. General Provisions

25370.

For purposes of this chapter and Chapter 4.5 (commencing with Section 25350), the following definitions apply:

(a) “Planned maintenance” means regular, periodic maintenance or repair of one or more pieces of equipment within a petroleum refinery that may require the shutdown of that equipment, or that may reduce production of a petroleum refinery.

(b) “Price spike” means a rate of increase of a refinery’s gross gasoline refining margin, as defined in Section 25355, that is greater than the rate of increase of the average price of crude oil received by the refinery, for the same period of time, or a rate of decrease of a refinery’s gross gasoline refining margin that is less than the rate of decrease of the average price of crude oil received by the refinery, for the same period of time.

(d) “Turnaround” has the same meaning as that term is defined in Section 7872 of the Labor Code.

(e) “Unplanned maintenance” means any maintenance or repair that requires the shutdown of any part of the petroleum refinery that will result in any reduction in production that was not scheduled as turnaround or planned maintenance.

Article 2. Transportation Fuels Assessment

25371.

(a) (1) Notwithstanding Section 10231.5 of the Government Code, on or before January 1, 2024, and every three years thereafter, the commission shall submit an assessment to the Legislature, in accordance with Section 9795 of the Government Code, and to the Governor that does all of the following:

(A) Identifies methods to ensure a reliable supply of affordable and safe transportation fuels in California. The assessment shall include estimates for the level of transportation fuels at the state level, and, to the extent feasible, at regional and local levels, and individual refineries if relevant, that should be held in reserve by refiners to prevent gasoline price spikes. The assessment shall consider all factors causing price fluctuation in retail gasoline prices when recommending adequate reserve levels. The commission shall consider all relevant evidence from any reasonably available source, including, but not limited to, information about imports, by amount, source, if known, and data received by the commission pursuant to existing laws, economic and business experts, and information from any local, state, and federal agencies. The commission shall transmit to the Legislature, in accordance with Section 9795 of the Government Code, any proposals it deems appropriate for mandatory reserve levels and the terms of a program to implement reserve levels.

(B) Evaluates the price of transportation fuels, including branded and unbranded retail prices, alternate formulations of gasoline with lower carbon impact, and other products suitable for production from refineries in California. This evaluation shall consider the market demand for these products at 3-, 7-, 10- and 20-year intervals from the date of the assessment and shall rely on the most recent transportation forecasting and assessment activities conducted pursuant to Section 25304. This evaluation shall include both of the following:

(i) An examination of whether branded fuel additives have any impact, and if so, how much, on fuel efficiency and vehicle emissions.

(ii) An assessment of the presence and availability of retail outlets, including monitoring changes in availability of retail outlets that contribute to increasing retail prices in local and regional areas.

(C) Considers different levels of supply conditions and assesses the impact of potential refinery closures in California.

(D) Includes an analysis of the impacts on production of refinery planned maintenance, unplanned maintenance, and turnaround. The assessment shall evaluate ways to manage necessary maintenance among the various facilities that would protect the health and safety of employees and the public, and minimize the impact of maintenance-related production losses. Notwithstanding any other law, the Department of Industrial Relations and Division of Occupational Safety and Health shall disclose to the commission, upon request, any information the department and division have received under Section 7872 of the Labor Code to ensure all aspects of refinery safety are incorporated into the assessment. All information designated confidential shall be treated as confidential by the commission.

(E) Evaluates the utility and feasibility of alternative methods to maintain adequate supplies of transportation fuels, including delivery alternatives for fuel and components of refined fuel, such as delivery by rail, a publicly maintained strategic fuel reserve, and other solutions beyond the activities of refineries and petroleum market participants.

(F) Proposes solutions to mitigate any impacts described in the assessment. The solutions shall include an assessment of the employment impacts and the cost and cost-effectiveness of any proposal, including cost impacts to all impacted sectors, both public and private. The assessment shall include recommendations and alternatives.

(2) The first assessment shall include the evaluation of oil and gas extraction and refining that the State Air Resources Board outlined in the most recent update to the scoping plan prepared pursuant to Section 38561 of the Health and Safety Code.

(b) The assessment shall be separate from the report submitted pursuant to Section 25302 and shall be developed in a public process. The assessment shall be available to the public within the proceeding docket and shall be approved by a vote of the commission at its business meeting.

(c) The commission may enter into contracts to perform the assessment required by subdivision (a) and the contracts shall not require the review, consent, or approval of the Department of General Services or any other state department or agency and do not need to comply with requirements under the State Contracting Manual or the Public Contract Code.

(d) The Division of Petroleum Market Oversight shall provide input to and otherwise support other divisions of the commission in preparation of the assessment required by subdivision (a).

25371.1.

(a) The commission shall use reasonable means necessary and available, including, but not limited to, the authority under subdivisions (e) and (f) of Section 11181 of the Government Code, to seek and obtain any facts, figures, and other information from any source for the purpose of preparing the assessment under Section 25371. The commission shall specifically report in the assessment any ongoing or unsuccessful attempts to obtain information from potential sources, including the lack of cooperation or refusal to provide information.

(b) For purposes of the assessment prepared under Section 25371, the commission may impose a civil penalty whenever a person fails to timely provide the information specified in that section and any other information the commission deems necessary to conduct the assessment. A civil penalty under this subdivision shall be imposed under the procedures set forth in subdivision (a) of Section 25362.

(c) Subdivisions (b) and (c) of Section 25362 shall apply to a person who willfully submits or makes any false statement to the commission.

(d) The commission shall conduct a public meeting in December of each year to provide an opportunity for the public to provide input on transportation fuel prices.

25371.2.

(a) The commission shall aggregate information used in the assessment prepared under Section 25371 to the extent necessary to ensure its confidentiality if public disclosure of the specific information or data would adversely affect market competition.

(b) A person required to present information to the commission pursuant to Section 25371 may request that specific information be held in confidence. Information requested to be held in confidence shall be presumed to be confidential.

(c) For purposes of the assessment conducted under Section 25371, the commission shall comply with the disclosure of information requirements of subdivisions (c) to (e), inclusive, of Section 25364.

25371.3.

On or before December 31, 2024, the commission and the State Air Resources Board, taking into account findings of the assessment conducted under Section 25371, shall prepare a Transportation Fuels Transition Plan. The commission and the State Air Resources Board shall determine the contents of the report, but the report shall include, at a minimum, a discussion of how to ensure that the supply of petroleum and alternative transportation fuels is affordable, reliable, equitable, and adequate to meet the demand for those transportation fuels described in the most current scoping plan approved by the State Air Resources Board under Section 38561 of the Health and Safety Code. The report shall be prepared in consultation with the state’s fuel producers and refiners and a multistakeholder, multiagency workgroup, including the California Environmental Protection Agency and the Natural Resources Agency, convened by the commission and the State Air Resources Board to identify mechanisms to plan for and monitor progress toward the state’s reliable, safe, equitable, and affordable transition away from petroleum fuels in line with declining instate petroleum demand. The Division of Petroleum Market Oversight shall provide input to and otherwise support other divisions of the commission in preparation of the plan.

Article 3. Division of Petroleum Market Oversight

25372.

For purposes of this article and Article 4 (commencing with Section 25373), “division” means the Division of Petroleum Market Oversight.

25372.1.

(a) The Division of Petroleum Market Oversight is hereby established in the commission.

(b) Notwithstanding Chapter 3 (commencing with Section 25200), the division shall operate with authority independent of the commission’s authority.

(c) The division shall be led by a director, who is appointed by the Governor and is subject to confirmation by the Senate, and holds office at the pleasure of the Governor.

(d) The annual salary of the director shall be provided for by Chapter 6 (commencing with Section 11550) of Part 1 of Division 3 of Title 2 of the Government Code.

(e) The director shall employ and prescribe the duties of other staff members as necessary to carry out the provisions of this article. The staff shall include, when feasible, economists, individuals with expertise in the transportation fuels markets, and investigative staff with legal training.

25372.2.

(a) The division shall do all of the following:

(1) Provide independent oversight and analysis of the transportation fuels markets for the protection of consumers by identifying market design flaws, market power abuses, and any other manner by which market participants act to harm competition or act contrary to the best interests of consumers in the state.

(2) Provide guidance and recommendations to the commission relating to the development of the assessment required by Section 25371 and the Transportation Fuels Transition Plan described in Section 25371.3.

(3) Provide guidance and recommendations to members of the commission, other divisions of the commission, and the California Department of Tax and Fee Administration relating to the reports described in Section 25355.7.

(4) Provide guidance and recommendations to the Governor, members of the commission, and other divisions of the commissions on any other issues related to transportation fuels pricing and transportation decarbonization in California.

(5) Report its findings and recommendations to improve market performance at least annually to the Legislature, in accordance with Section 9795 of the Government Code, the Governor, the commission, the Attorney General, and the California Department of Tax and Fee Administration.

(b) The division may subpoena witnesses, compel their attendance and testimony, administer oaths and affirmations, take evidence and require by subpoena the production of any books, papers, records, or other items material to the performance of the division’s duties or exercise of its powers, including, but not limited to, current and historical pricing and sales data and contracts with other petroleum industry participants.

25372.3.

The director of the division shall, when requested, appear before the appropriate policy committees in the Assembly and Senate to provide an update on the division’s performance as compared to its objectives, the status of competition in the transportation fuels markets, and any other information the committees request.

25372.4.

(a) Information provided to the division shall presumptively be confidential and not subject to public disclosure. The division shall not divulge or make known in any manner any information provided to it unless it determines both of the following:

(1) Public disclosure of the specific information would not result in unfair competitive disadvantage to the person supplying the information.

(2) Public disclosure of the specific information would not adversely affect market competition.

(b) Notwithstanding any other law, the division may disclose information deemed confidential under this subdivision to members of the commission, other divisions of the commission, the Attorney General, or the California Department of Tax and Fee Administration if the receiving entity agrees to keep the information confidential, except that the Attorney General may present the information to a court to support an enforcement action but shall submit confidential information under seal where permissible. If the Attorney General requests the assistance of the division in connection with any investigation, the division shall provide information to the Attorney General under this subdivision and any other assistance that is feasible.

(c) For purposes of the division’s annual reports under Section 25372.2, the division shall aggregate data or otherwise anonymize and generalize information as needed to mitigate the risk that public disclosure of the specific information would result in unfair competitive disadvantage to the person supplying the information or would adversely affect market competition.

Article 4. Independent Consumer Fuels Advisory Committee

25373.

(a) The commission and division shall be advised by the Independent Consumer Fuels Advisory Committee which is hereby established within the commission. The committee shall consist of the following members:

(1) Six members appointed by the Governor as follows:

(A) A member who holds an academic appointment and has knowledge of economics or business operations of the transportation fuels market.

(B) A member representing the California petroleum fuels industry.

(D) A member representing labor.

(E) A member with expertise in community, environmental, or environmental justice issues.

(F) A member with expertise in antitrust law.

(2) One member appointed by the Speaker of the Assembly.

(3) One member appointed by the Senate Committee on Rules.

(b) (1) Except for the member described in subparagraph (B) of paragraph (1) of, or subparagraph (D) of paragraph (1) of, subdivision (a), no member of the committee shall have been employed by, contracted with, or received direct compensation from, a company that produces, refines, distributes, trades in, markets, or sells any petroleum product in the preceding 12 months.

(2) Except for the member described in subparagraph (B) of paragraph (1) of, or subparagraph (D) of paragraph (1) of, subdivision (a), before accepting appointment, members of the committee shall agree, in writing, not to be employed by, contract with, or receive direct compensation from companies described in paragraph (1) for the 12 months following the completion of their service on the committee.

(c) Each member of the committee shall receive a per diem of one hundred dollars ($100) for each day actually spent in the discharge of official duties, and shall be reimbursed for traveling and other expenses necessarily incurred in the performance of official duties.

(d) The duties, organization, and schedule of meetings of the Independent Consumer Fuels Advisory Committee shall be prescribed by the commission. The commission may delegate the authority under this subdivision to the executive director of the commission.

(e) The Independent Consumer Fuels Advisory Committee shall have access to all information submitted to the commission or to the division necessary to fulfill its duties. The members of the committee shall agree, in writing, to maintain the confidentiality of all information received.

(f) The executive director of the commission shall ensure that any confidential information shared with the members of the Independent Consumer Fuels Advisory Committee is subject to a nondisclosure agreement and is maintained in a way that protects it from inadvertent disclosure.

SEC. 11.

The Legislature finds and declares that Section 2 of this act, which amends Section 25354 of the Public Resources Code, Section 5 of this act, which adds Section 25355.5 to the Public Resources Code, and Section 6 of this act, which adds Section 25355.7 to the Public Resources Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

The restrictions on information prescribed in Sections 25354, 25355.5, and 25355.7 of the Public Resources Code is necessary to protect sensitive business information and trade secrets from public disclosure.

SEC. 12.

The Legislature finds and declares that Section 10 of this act, which adds Chapter 4.6 (commencing with Section 25370) to Division 15 of the Public Resources Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

The restrictions on information prescribed in Sections 25371.2 and 25372.4 are necessary to prevent adverse impacts on market competition in the transportation fuels sector and to protect the public health and safety and the environment, respectively.

SEC. 13.

The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 14.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

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