BILL ANALYSIS Ó AB 815 Page 1 Date of Hearing: April 13, 2015 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Das Williams, Chair AB 815 (Ridley-Thomas) - As Introduced February 26, 2015 SUBJECT: Oil spill prevention and response fees: collection SUMMARY: Clarifies who owes and pays the oil spill prevention fee (fee), excludes petroleum products derived from fee-paid crude oil, and deletes unnecessary oil pipeline operator registration requirements. EXISTING LAW: 1)Pursuant to the Lempert-Keene-Seastrand Oil Spill Prevention and Response Act, requires the Administrator of the Office of Spill Prevention and Response to annually set the fee rate, which is capped at $0.065 per barrel of crude oil or petroleum product. 2)Requires refinery, marine terminal, and pipeline operators to register with the Board of Equalization (BOE) and requires the BOE to administer and collect the fee. AB 815 Page 2 3)Requires the fee to be imposed upon a person owning crude oil or petroleum products at the time that the crude oil or petroleum products are received at a marine terminal or refinery by specified modes of delivery from within or outside the state. 4)Prohibits the fee from being collected by a marine terminal operator or refinery operator or imposed on the owner of crude oil or petroleum products if the fee has been previously collected or paid on the crude oil or petroleum products at another marine terminal or refinery and, in that case, requires a marine terminal operator, refinery operator, or owner of crude oil or petroleum products to demonstrate that the fee has already been paid. THIS BILL: 1)Deletes the provision that allows the owner of the crude oil or petroleum product to pay the fee to the BOE. The refinery or marine terminal operator would still pay the fee. 2)Allows a marine terminal and refinery operator to presume that the fee has been imposed on petroleum products derived from fee-paid crude oil refined at a California refinery. 3)Clarifies that pipeline operators are not required to register for and pay the fee, but are required to register for the Oil AB 815 Page 3 Spill Response Fee Program. 4)Adds a definition of "barrel" and deletes a definition of "oil." FISCAL EFFECT: Unknown COMMENTS: 1)Clean up. SB 861 (Committee on Budget and Fiscal Review), Chapter 35, Statutes of 2014, authorized the Oil Spill Prevention and Administration Fund to be used for inland oil spill response, eliminated the fee sunset, and expanded the fee base to include all crude oil entering the state. Since the passage of SB 861, the BOE has worked with the Department of Fish and Wildlife and affected industries to implement the expansion of the fee to include crude oil and petroleum products received at a refinery in this state. Some of the provisions of SB 861 have created confusion and fear of overpayment by feepayers. AB 815 allows marine terminal and refinery operators to presume that the fee has been imposed on petroleum products derived from fee-paid crude oil refined in California. In addition, this bill removes the registration requirements on pipeline operators because they no longer pay AB 815 Page 4 the fee. According to BOE these changes are clarifying in nature and will not impact fee revenues. 2)Prior legislation. SB 861 authorized the Oil Spill Prevention and Administration Fund to be used for inland oil response, eliminated the fee sunset, and expanded the fee base to include all crude oil entering the state. AB 2678 (Ridley-Thomas) stated legislative intent that the BOE only collect the fee on crude oil or petroleum products upon first delivery to a refinery or marine terminal and not upon subsequent movement of that same oil or products derived after that first delivery. AB 2678 passed off the Senate floor, but was never taken up for concurrence in the Assembly. REGISTERED SUPPORT / OPPOSITION: Support Board of Equalization (Sponsor) California Chamber of Commerce Western States Petroleum Association AB 815 Page 5 Opposition None on file Analysis Prepared by:Michael Jarred / NAT. RES. / (916) 319-2092