BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 815


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          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.











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          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  








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            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  








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            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











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          Opposition




          None on file


          Analysis Prepared by:Michael Jarred / NAT. RES. / (916) 319-2092