CA State Senators Propose Oil Permanent Fund to Pay for Education and Parks
On February 12, 2013, California State Senator Noreen Evans (D) introduced SB 241, a bill that will fund higher education and state parks in California. The bill would impose a severance tax on oil producers in California. The bill is co-authored by fellow State Senator Mark Leno (D) who is Chair of the California Senate Budget Committee. Democrats hold a majority in the state senate. Currently, there is no statewide severance tax on oil and gas production in California, but there is a small statewide assessment on oil and gas produced in the state.
The bill would enable the California Education and Resources Reinvestment Act (CERRA) which would impose a 9.9% severance tax on the extraction of oil from the ground or water within California’s jurisdiction. To be precise, the 9.9% severance tax would apply to the gross value of each barrel of oil severed. The tax revenue, along with interest and penalties, would funnel into a proposed Oil Severance Fund. [Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view site content.]