BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 815|
|Office of Senate Floor Analyses | |
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CONSENT
Bill No: AB 815
Author: Ridley-Thomas (D)
Introduced:2/26/15
Vote: 21
SENATE NATURAL RES. & WATER COMMITTEE: 9-0, 6/9/15
AYES: Pavley, Stone, Allen, Hertzberg, Hueso, Jackson,
Monning, Vidak, Wolk
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 77-0, 4/30/15 (Consent) - See last page for
vote
SUBJECT: Oil spill prevention and response fees: collection
SOURCE: State Board of Equalization
DIGEST: This bill makes clarifying and technical corrections to
statutes concerning the Oil Spill Prevention and Administration
Fund necessary due to the chaptering of last year's Resources
budget trailer bill.
ANALYSIS:
Existing law:
1)Establishes the Lempert-Keene-Seastrand Oil Spill Prevention
and Response Act (Act) (SB 2040, Chapter 1248, Statutes of
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1990) (Government Code (GOV) §§8670.1 et seq., and others).
The Act created the Office of Spill Prevention and Response
(OSPR) in the Department of Fish and Wildlife.
2)Establishes the Oil Spill Prevention and Administration Fund
(OSPAF) which finances oil spill prevention and planning
programs and certain other items.
3)Provides for the OSPAF per barrel fee (set at 6.5[) to be
assessed upon receipt of crude oil and petroleum products at
refineries, marine terminals or from offshore oil production
facilities. The owner of the crude oil or petroleum products
is response for the fee which is paid to the State Board of
Equalization (BOE).
4)Provides for the OSPAF fee to be collected once only (GOV
§8670.40(b)(5)) in order to address, for example, the
situation where a barrel of crude oil refined into petroleum
products is exported via a marine terminal. In this instance,
the barrel would pass through two fee collection points but
should be assessed only once.
This bill makes clarifying and technical changes to OSPAF fee
collection necessary following the passage of the Fiscal Year
2014/2015 resources budget trailer bill (SB 861, Committee on
Budget and Fiscal Review, Chapter 35, Statutes of 2014) last
year. Specifically, this bill:
1)Authorizes a marine terminal or refinery operator receiving
petroleum products derived from crude oil refined in the state
to presume the fee has already been collected.
2)States legislative intent that the BOE collect the OSPAF fee
only upon first delivery to a refinery or a marine terminal.
3)Deletes the requirement that the owner of crude oil/petroleum
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products remit the fee directly to the BOE.
4)Makes additional clarifying and technical changes.
Background
OSPR's mission. OSPR's mission is to provide the best
achievable protection of California's natural resources and the
public health and safety by preventing, preparing for, and
responding to spills of oil and other deleterious materials; and
to restore and enhance affected resources.
This is clean-up legislation that clarifies OSPAF fee
collection. Prior to the passage of the resources budget
trailer bill last year, OSPAF was primarily funded by a per
barrel fee of 6.5[ assessed on each barrel of crude oil or
petroleum products received at marine oil terminals or from
offshore production facilities. The resources budget trailer
bill substantially revised the Act to address, in part, the
potential growth of crude oil transport into and in California
by rail. The OSPAF fee is now assessed upon receipt of crude
oil and petroleum products at refineries too. Clarifying
changes to, for example, make clear that the refinery operator
or the marine terminal owner who collects the fee from the owner
can remit them to the BOE, not the owner of the crude
oil/petroleum products, are necessary.
The Act and its fees implicitly depend upon the existing
California market. The OSPAF fees are collected upon arrival at
marine terminals or at refineries. This presumes that all/most
of the crude oil and petroleum products pass through either a
marine terminal or refinery at least once. Crude oil produced
in California, but refined elsewhere, could potentially bypass
the OSPAF fee. This does not currently occur -- according to
the California Energy Commission, no California crude oil has
been exported from the state in 2014 or 2015, the most recent
data available. Should energy policy and the California crude
oil/petroleum products market change in the future, these
implicit assumptions may no longer remain true. For example,
there has been a recent push to change federal energy policy to
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lift the ban on crude oil exports (see S.1312, the Energy Supply
and Distribution Act of 2015, introduced with bipartisan support
last month in the U.S. Congress).
Related Legislation
SB 861 (Committee on Budget and Fiscal Review, Chapter 35,
Statutes of 2014), the resources budget trailer bill,
substantially amended the Act to address the growth/potential
growth of crude oil transport by rail in California.
AB 2678 (Ridley-Thomas, 2014) was an earlier attempt at OSPAF
fee resources budget trailer bill clean-up language. (The bill
died on the Assembly Unfinished Business File with the
concurrence vote pending.)
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified6/30/15)
State Board of Equalization (source)
California Chamber of Commerce
OPPOSITION: (Verified 6/30/15)
None received
ARGUMENTS IN SUPPORT: According to the author, "While SB 861
expanded the [OSPAF] fee to crude oil and petroleum products
received at the refinery, the bill also added provisions that
prevent the fee from being imposed or paid twice on the same
crude oil or petroleum products. However, current law is not
clear that petroleum products derived from fee-paid crude oil,
once refined, are not subject to the fee."
"BOE staff believes that legislative intent language alone may
be ineffective to relieve industry from the requirement to
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document that the [OSPAF] fee previously was paid on petroleum
products derived from fee-paid crude oil. Therefore, statutory
guidance is necessary to clarify the issue."
The BOE in its support letter indicates that the benefits of the
bill include "reduced confusion," "improved method for
preventing [the] double fee," and "ease of administration."
ASSEMBLY FLOOR: 77-0, 4/30/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, Chau,
Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd,
Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gonzalez, Gordon, Gray, Grove,
Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Campos, Chávez, Gomez
Prepared by:Katharine Moore / N.R. & W. / (916) 651-4116
7/1/15 11:15:42
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