Bill Text: CA SB241 | 2013-2014 | Regular Session | Amended
Bill Title: Oil Severance Tax Law.
Spectrum: Partisan Bill (Democrat 9-0)
Status: (Introduced - Dead) 2014-02-03 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB241 Detail]
Download: California-2013-SB241-Amended.html
BILL NUMBER: SB 241 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 7, 2013
AMENDED IN SENATE APRIL 24, 2013
INTRODUCED BY Senator Evans
(Principal coauthor: Senator Jackson)
(Coauthors: Senators Beall, Block, DeSaulnier, Hancock, Leno, Liu,
and Wolk)
FEBRUARY 12, 2013
An act to add Part 21 (commencing with Section 42001) to Division
2 of the Revenue and Taxation Code, relating to taxation, and making
an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 241, as amended, Evans. Oil Severance Tax Law.
Existing law imposes various taxes, including taxes on the
privilege of engaging in certain activities. The Fee Collection
Procedures Law, the violation of which is a crime, provides
procedures for the collection of certain fees and surcharges.
This bill would impose an oil and gas severance tax upon any
operator, as defined, for the privilege of severing oil or gas from
the earth or water in this state for sale, transport, consumption,
storage, profit, or use, as provided, at the specified notes
rates , calculated as provided. The tax would
be administered by the State Board of Equalization and would be
collected pursuant to the procedures set forth in the Fee Collection
Procedures Law. The bill would require the board to deposit all tax
revenues, penalties, and interest collected pursuant to these
provisions into the California Higher Education Fund, a continuously
appropriated fund created by this bill, for allocation to the Regents
of the University of California, the Trustees of the California
State University, the Board of Governors of the California Community
Colleges, and the Department of Parks and
Recreation, and to a reserve account, as provided.
Because this bill would expand the scope of the Fee Collection
Procedures Law, the violation of which is a crime, it would impose a
state-mandated local program.
This bill would include a change in state statute that would
result in a taxpayer paying a higher tax within the meaning of
Section 3 of Article XIII A of the California Constitution, and thus
would require for passage the approval of 2/3 of the membership of
each house of the Legislature.
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: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Part 21 (commencing with Section 42001) is added to
Division 2 of the Revenue and Taxation Code, to read:
PART 21. OIL SEVERANCE TAX LAW
42001. This part shall be known and may be cited as the Oil
Severance Tax Law.
42002. For purposes of this part, the following definitions shall
apply:
(a) "Barrel of oil" means 42 United States gallons of 231 cubic
inches per gallon computed at a temperature of 60 degrees Fahrenheit.
(b) "California Higher Education Fund" or "CHEF" means the fund
that is created by Section 42147.
(c) "Gas" means all natural gas, including casing head gas, and
all other hydrocarbons not defined as oil in subdivision (f).
(d) "Division" means the Division of Oil, Gas, and Geothermal
Resources in the Department of Conservation.
(e) "In this state" means within the exterior limits of the State
of California and includes all territory within these limits owned by
or ceded to the United States of America. "In this state" includes
the mean high tide line to three nautical miles offshore.
(f) "Oil" means petroleum, or other crude oil, condensate, casing
head gasoline, or other mineral oil that is mined, produced, or
withdrawn from below the surface of the soil or water.
(g) "Operator" means a person that, by virtue of ownership, or
under the authority of a lease or any other agreement, has the right
to drill, operate, maintain, or control an oil or gas well in the
earth or water in this state, including any person that takes oil or
gas from the earth or water in this state in any manner, any person
that owns, controls, manages, or leases any oil or gas well in the
earth or water of this state, and any person that produces or
extracts in any manner any oil or gas by taking it from the earth or
water in this state; and includes the first person that acquires
either the legal title or beneficial title to oil or gas taken from
the earth or water in this state by the federal government or a
federal instrumentality.
(h) "Political subdivision of the state" includes any local public
entity, as defined in Section 900.4 of the Government Code.
(i) "Severed" or "severing" means the extraction or withdrawing
from below the surface of the earth or water of any oil or gas,
regardless of whether the extraction or withdrawal shall be by
natural flow, mechanical flow, forced flow, pumping, or any other
means employed to get the oil or gas from below the surface of the
earth or water, and shall include the extraction or withdrawal by any
means whatsoever of oil or gas upon which the tax has not been paid,
from any surface reservoir, natural or artificial, or from a water
surface.
(j) Stripper "Stripper well" means a
well that has been certified by the division as an oil well
incapable of producing an average of more than 10 barrels of oil per
day during the entire calendar month or a gas well that is incapable
of producing more than 60,000 cubic feet of gas per day. Once a well
has been certified as a stripper well, that stripper well shall
remain certified as a stripper well until the well produces an
average of more than 10 barrels of oil per day during an entire
calendar month.
(k) "Unit of gas" means 1,000 cubic feet (mcf) measured at a base
pressure of 15.025 pounds per square inch absolute and at a
temperature base of 60 degrees Fahrenheit.
42010. (a) (1) An oil and gas severance tax is hereby imposed
upon any operator for the privilege of severing oil or gas from the
earth or water in this state at the rate of 9.5%
9.5 percent of the average price per barrel of California
oil or ____% 3.5 percent of the average
price per unit of gas, as calculated pursuant to this section.
(2) (A) On or before December 1, 2013, and June 1, 2014, and on or
before those dates of each year thereafter, the division shall
determine the average price per barrel of California oil for the
six-month period ending on the preceding October 31 and April 30,
respectively. The price of California oil shall be based on the first
purchase price for California Midway-Sunset crude oil as determined
by the United States Energy Information Administration's (EIA) First
Purchase Report. In the event the EIA First Purchase Report is
delayed or discontinued, the division may base its determination on
other sources of first purchase prices of California oil.
(B) On or before December 1, 2013, and June 1, 2014, and on or
before those dates of each year thereafter, the division shall
determine the average price per unit of gas for the six-month period
ending on the preceding October 31 and April 30, respectively. The
price of gas shall be based on California's price for gas as
determined by the United States Energy Information Administration's
(EIA) Report. In the event the EIA Report is delayed or discontinued,
the division may base its determination on other sources of city
gate prices of California gas.
(C) The division shall notify the board of its determinations
pursuant to subparagraphs (A) and (B), on or before December 1, 2013,
and June 1, 2014, and on or before those dates on each year
thereafter.
(b) Any person that owns an interest, including a royalty
interest, in oil or its value, is liable for the tax until it has
been paid to the board.
42012. The tax imposed by this part shall be in addition to any
other taxes imposed by law, including, without limitation, any ad
valorem taxes imposed by the state, or any political subdivision of
the state, or any local business license taxes that may be incurred
for the privilege of severing oil or gas from the earth or water or
doing business in that locality. There shall be no exemption from the
payment of an ad valorem tax related to equipment, material, or
other property by reason of the payment of the severance tax pursuant
to this part.
42013. (a) The tax imposed by this part shall not be passed
through to consumers by way of higher prices for oil, natural gas,
gasoline, diesel, or other oil or gas consumable byproducts, such as
propane and heating oil. The board shall monitor and, if necessary,
investigate any instance where operators or purchasers of the oil or
gas have attempted to gouge consumers by using the tax as a pretext
to materially raise the price of oil, natural gas, gasoline, diesel,
or other oil or gas consumable byproducts, such as propane and
heating oil.
(b) The board may prescribe, adopt, and enforce rules and
regulations relating to the administration and enforcement of this
section.
(c) Any operator that fails to comply with this section shall pay
a penalty in an amount specified by the board not to exceed ____
dollars ($____) for each instance the operator violates this section,
as defined by the board in the regulatory process.
(d) This section applies when not superseded by federal law.
42014. Two or more operators that are owned or controlled
directly or indirectly, as defined in Section 25105, by the same
interests shall be considered as a single operator for purposes of
application of the tax prescribed in this part.
42015. (a) There shall be exempted from the imposition of the oil
and gas severance tax imposed pursuant to this part, the severance
of oil or gas produced by a stripper well when, as
determined pursuant to Section 42010, the average price per barrel of
California oil is ____ dollars ($____) or less, or when the average
price per unit of gas is____ dollars ($____) or less
well, unless the well produces more than five barrels per month
.
(b) The division shall notify the board of all wells that have
been certified as stripper wells.
42016. There shall be exempted from the imposition of the tax
imposed pursuant to this part all oil, gas, or both oil and gas owned
or produced by the state or any political subdivision of the state,
including such public entity's proprietary share of oil or gas
produced under any unit, cooperative, or other pooling agreement.
42019. Each operator shall prepare and file with the board a
return in the form prescribed by the board containing information as
the board deems necessary or appropriate for the proper
administration of this part. The return shall be filed on or before
the last day of the calendar month following the calendar quarter to
which it relates, together with a remittance payable to the board for
the amount of tax due for that period.
42145. (a) The board shall administer and collect the tax imposed
by this part pursuant to the Fee Collection Procedures Law (Part 30
(commencing with Section 55001)). For purposes of this part, the
references in the Fee Collection Procedures Law to "fee" shall
include the tax imposed by this part and references to "feepayer"
shall include any person liable for the payment of the tax imposed by
this part.
(b) The board may prescribe, adopt, and enforce regulations
relating to the administration and enforcement of this part,
including, but not limited to, provisions governing collections,
reporting, refunds, and appeals.
(c) The board may prescribe, adopt, and enforce emergency
regulations relating to the administration and enforcement of this
part. Any emergency regulations prescribed, adopted, or enforced
pursuant to this section shall be adopted in accordance with Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code, and, for purposes of that chapter,
including Section 11349.6 of the Government Code, the adoption of
these regulation is an emergency and shall be considered by the
Office of Administrative Law as necessary for the immediate
preservation of the public peace, health and safety, and general
welfare.
42147. (a) All taxes, interest, penalties, and other amounts
collected pursuant to this part, less refunds and costs of
administration, shall be deposited first into the General Fund
and then into the California Higher Education Fund, which is
hereby created in the State Treasury. Notwithstanding Section 13340
of the Government Code, moneys in the fund are continuously
appropriated, without regard to fiscal year, as follows:
(1) Ninety-three Ninety percent of
the moneys in the fund, in equal shares, to the Regents of the
University of California, the Trustees of the California State
University, and the Board of Governors of the California Community
Colleges for the general support of those institutions.
(2) Seven Five percent of the moneys
in the fund to the Department of Parks and Recreation for the
maintenance and improvement of state parks.
(3) Five percent of the moneys in the fund to a reserve account in
the fund which shall only be used in a disaster as proclaimed by the
Governor.
(b) Revenues, less refunds, derived pursuant to Section 42013 for
deposit in the California Higher Education Fund pursuant to this
section shall be deemed "General Fund revenues," "General Fund
proceeds of taxes," and "moneys to be applied by the State for the
support of school districts and community college districts" for
purposes of Section 8 of Article XVI.
(c) Any local property tax reductions that may result from the
imposition of the tax by this part shall be reimbursed from the
revenues received from the imposition of the tax.
42148. Funds allocated pursuant to this part shall supplement,
and not supplant, existing funding sources and amounts.
SEC. 2. 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.
