Oil and gas severance tax

By CMTA Staff

Capitol Update, Feb. 12, 2010 Share this on FacebookTweet thisEmail this to a friend

Assemblyman Alberto Torrico (D-Newark) gutted his controversial oil severance bill, AB 656, late last month due to challenges brought forth by the education community.  A previous version of the bill would have levied a 12.5 percent tax on all oil and gas pumped from California.  The tax proceeds would have been split among California's UC, CSU and Community College education system.

According to leaders from the education community, the bill would probably do more harm than good since it unevenly split tax proceeds among the three education systems and would only have allowed the money to be used for classroom instruction.

In response to these concerns, Torrico removed all funding provisions in the bill.  It now requires the State Board of Equalization to report annually to the Legislature, UC Regents, CSU Trustees and Board of Governors of the California Community Colleges the estimated amount of revenue that would have been raised if the bill had become law.

Torrico has stated his intent to revisit the oil severance tax and education funding issues in the near future.

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