BILL ANALYSIS
SENATE RULES COMMITTEE SB 1187
Office of Senate Floor Analyses
1020 N Street, Suite 524
(916) 445-6614 Fax: (916) 327-4478
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UNFINISHED BUSINESS
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Bill No: SB 1187
Author: Maddy (R)
Amended: 5/31/95
Vote: 21
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SENATE GOVERNMENTAL ORG. COMMITTEE: 9-0, 4/18/95
AYES: Alquist, Beverly, Greene, Haynes, Hughes, Lewis,
Rosenthal, Maddy, Dills
NOT VOTING: Mello, Thompson
SENATE APPROPRIATIONS COMMITTEE: 8-3, 5/15/95
AYES: Johnston, Dills, Kelley, Killea, Leonard, Leslie,
Lewis, Mountjoy
NOES: Alquist, Greene, Mello
NOT VOTING: Calderon, Polanco
SENATE FLOOR: 34-1, 6/1/95
AYES: Alquist, Beverly, Boatwright, Calderon, Costa,
Dills, Greene, Haynes, Hughes, Hurtt, Johannessen,
Johnston, Kelley, Killea, Kopp, Leonard, Leslie, Lewis,
Lockyer, Maddy, Marks, Mello, Monteith, Mountjoy,
O'Connell, Petris, Polanco, Rogers, Rosenthal, Russell,
Solis, Thompson, Watson, Wright
NOES: Peace
NOT VOTING: Ayala, Campbell, Craven, Hayden, Johnson
ASSEMBLY FLOOR: Not Available
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SUBJECT: Tidelands revenue: revenue sharing
SOURCE: Santa Barbara County
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DIGEST: This bill requires that an additional 20 percent
of state revenues from oil and gas wells from state
tidelands be paid to the city or ocunty within whose
obundaries the revenue is generated, up to $200 million per
year (adjusted annually to reflect Consumer Price Index
increases) for up to 20 years, if certain specified
conditions are met.
Assembly Amendments:
1. Lower the percentage amount of the revenues to be paid
from 25 percent to 20 percent and it is not to exceed a
total of $200 million adjusted for inflation over a
20-year period.
2. State that it is not the intent of the Legislature in
enacting the bill to allow any development or affect any
provision of the California Coastal Sanctuary Act of
1994.
3. Add the following exceptions to the bill: (a) revenues
from leases on tideflats; (b) revenue from uplands unless
slant drilling is employed; and (c) revenue from leases
where neither a local nor state development plan was
submitted by January 1, 2002.
ANALYSIS: Existing law:
1. Establishes state ownership of all tide and submerged
lands located within three miles of the California coast.
2. Allocates revenue from oil and gas leases in state
tidelands for the budget of the State Lands Commission,
the California Water Fund, the Sea Grant Program, the
Capitol Outlay Program for Public Higher Education, the
Energy Resources Fund and the Special Account for Capital
Outlay.
3. Allocates up to 1% of revenue from state oil and gas
tidelands to local governments within which the tidelands
are located, to a maximum of $100,000 per mile of ocean
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frontage which the local government operates as a park.
4. Requires tidelands oil and gas revenue allocated to
local governments to be used for specified, public trust
purposes, including commerce, navigation, fisheries,
recreation and the environment.
This bill requires that an additional 20 percent of state
revenues from oil and gas wells from state tidelands be
paid to the city or county within whose boundaries the
revenue is generated, up to $200 million per year (adjusted
annually to reflect Consumer Price Index increases) for up
to 20 years, if any of the following conditions are met:
1. The tidelands oil and gas lease was not under
production in 1994.
2. The lease was under production in 1994 but was subject
to a boundary adjustment.
3. The lease was under production in 1994 and new
production has been generated from a new drilling site
constructed after January 1, 1996.
4. The oil and gas is generated from a production zone not
under production prior to January 1, 1996.
5. The oil and gas is generated as a result of a
development plan approved by the State Lands commission
after January 1, 1996.
The bill does not apply to: 1) revenue from tidelands
granted by the state to local government without
reservation of minerals to the state; 2) revenues from the
Long Beach Unit operations; 3) revenue from leases on
"tideflats," as defined; 4) revenue from uplands unless
slant drilling is employed; and 5) revenue from leases
where neither a local nor state development plan was
submitted by January 1, 2002.
The Department of Financeos analysis of the bill indicates
that according to the authoros office, the bill would
secure funds for potential mitigation of adverse
environmental impacts, in particular Santa Barbara County,
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where Mobile Oil wishes to develop a site.
Santa Barbara County has sponsored this measure to increase
its share of state revenue generated from new oil and gas
development on state tidelands within its borders. The
sponsor points out that new leases of state tidelands are
now prohibited. New oil development is permitted only in
association with existing leases and therefore local
jurisdictions where tidelands oil is already produced will
be "disproportionately impacted compared with the rest of
the state." According to the Senate Appropriations
Committee, this bill will affect only Orange, Ventura and
Santa Barbara Counties.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
According to the sponsor, Santa Barbara County, transfers
up to $200 million in future state revenues to several
coastal local governments.
SUPPORT: (Verified 7/10/96)
Santa Barbara County (source)
CSAC
Mobile Oil Company
OPPOSITION: (Unable to reverify support at time of this
writing)
Department of Finance
ARGUMENTS IN SUPPORT: According to the sponsor: "... it
should share in royalty revenues, since it bears the local
impacts of the operations that generate revenue to the
state." The sponsor also argues that SB 1187 "is critical
to the economic health and well-being of our County."
Finally, the sponsor argues that the bill "would not cause
the State to lose any existing revenue because the bill
applies only to new development."
ARGUMENTS IN OPPOSITION: The Department of Finance is
opposed because of the loss of tidelands oil revenue to the
state.
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DLW:jk 7/10/96 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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