BILL ANALYSIS Ó AB 815 Page 1 Date of Hearing: April 22, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 815 (Ridley-Thomas) - As Introduced February 26, 2015 ----------------------------------------------------------------- |Policy | Natural Resources |Vote:|9 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: SUMMARY: This bill clarifies provisions from the 2014 resources budget AB 815 Page 2 trailer bill relating to the expansion of the oil spill prevention fee program to avoid confusion and overpayment. Specifically, this bill: 1)Specifies that a marine terminal and refinery operator may presume the fee has been paid on petroleum products derived from fee-paid crude oil refined in California. 2)Deletes the provision that allows the owner of the crude oil or petroleum products to pay the fee directly to the Board of Equalization (BOE) 3)Deletes the requirement for pipeline operators to register with the BOE. FISCAL EFFECT: 1)Minor, absorbable BOE administrative costs. 2)No anticipated impact on oil spill prevention fee revenues. COMMENTS: 1)Rationale. Last year's resources budget trailer bill, SB 861, Chapter 35, Statutes of 2014, eliminated the sunset on the oil spill prevention fee, and expanded the fee base to include all crude oil entering the state. SB 861 specifically expanded the fee from only marine waters to all waters of the state and all crude oil and petroleum products received at a refinery. AB 815 Page 3 SB 861 also authorized the fee revenues to be used for inland oil response and contained a provision to prevent the fee from being imposed or paid twice on the same crude or petroleum products. However, according to BOE staff, it is not clear that petroleum products derived from fee-paid crude oil, once refined, is not subject to the fee. This bill clarifies the intent of last year's SB 861 and makes several administrative changes to reduce confusion regarding the expansion of the fee. 2)Background. The Oil Spill Administrator annually sets the fee rate. The current fee rate cap is $0.065 per gallon. The Administrator is required to prepare a plan that projects revenues and expenses over three fiscal years. The fee amount is set so that the projected revenue will meet current and proposed state budget needs. The Administrator may also allow for a surplus if revenues will not be adequate to meet contingencies and shortfalls. The refinery, marine terminal, and pipeline operators must each register with the BOE. The owner of the crude oil or petroleum products, the marine terminal operator, or the refinery operator pays the fee monthly to the BOE. If the fee has been previously collected or paid on the crude oil or petroleum products at another marine terminal or refinery, the fee will not be imposed or collected again. The marine terminal or refinery operator or the owner of the crude oil or petroleum products has the obligation to demonstrate that the fee has been previously paid on the same crude oil or petroleum product. AB 815 Page 4 Fees are deposited into the Oil Spill Prevention and Administration Fund to pay for oil spill prevention programs and studies. A separate fee funds oil spill response activities. Analysis Prepared by:Jennifer Galehouse / APPR. / (916) 319-2081