SB 1017 Summary

• Imposes an oil and gas severance tax of 9.5% on California oil and 3.5% on natural gas, effective July 1, 2015, administered by the State Board of Equalization and collected under existing fee collection procedures

• Establishes the California Higher Education Endowment Corporation (CHEEC) with a 15-member oversight board to allocate tax revenues from the California Higher Education Fund to education and other state programs

• Allocates severance tax revenues first to reimburse counties for property tax losses, then distributes remaining funds 50% equally to UC, Cal State, and Community Colleges for deferred maintenance and capital projects, 25% to Parks and Recreation, and 25% to Health and Human Services

• Exempts stripper wells (producing 10 barrels of oil or 60,000 cubic feet of gas per day or less) from the severance tax

• Requires 2/3 legislative approval due to tax increase provision in California Constitution Article XIII A, and declares the act an urgency statute taking effect immediately