On Monday, the Planning and Conservation League (League) joined Assemblymember Pedro Nava as he announced the introduction of new legislation designed to ensure that big oil companies that operate in California compensate the state for extracting oil. The bill, known as the Oil Industry Fair Share Act, ABX6 1 (Nava), brings California in line with other oil producing states by requiring oil companies to pay a severance tax of ten percent. Every other major oil producing state, including Alaska and Texas, have this tax.
The revenue generated by the proposed tax would go into the state’s general fund and help balance the budget. Along with the League, Mr. Nava was joined by representatives from Environment California, senior groups, school workers and nurses. These groups all asked the legislature to pass the Oil Industry Fair Share Act to help prevent more severe cuts to vital state services, noting that big oil currently gets a free ride while residents throughout the state are asked to sacrifice to help balance the budget. The measure is estimated to contribute $1.5 billion to the general fund annually.