3400. The charges directed to be levied by this article are
necessary in the exercise of the police power of the State and to
provide a means by which to supervise and protect deposits of oil and
gas within the State, in which deposits the people of the State have
a primary and supreme interest.
3401. The proceeds of charges levied, assessed, and collected
pursuant to this article upon the properties of every person
operating or owning an interest in the production of any well shall
be used exclusively for the support and maintenance of the division
of the department charged with the supervision of oil and gas
operations.
3402. There shall annually be imposed upon the person operating
each oil well in this state, or owning royalty or other interests in
respect to the production from the well, a charge which shall be
payable to the Treasurer and which shall be computed at a uniform
rate per barrel of oil produced from the well for the preceding
calendar year. The charge shall be apportioned among all of those
persons in fractional amounts proportionate to their respective
fractional interests in respect to the production of the well, but
the whole of the charge shall be payable by the operator, who shall
withhold their respective proportionate shares of the charge from the
amounts otherwise payable or deliverable to the owners of royalty or
other interests. In the case of a penalty for late payment as
provided in Section 3420, no apportionment shall be made.
3402.3. (a) Any increase by the department in the charge imposed
pursuant to Section 3402 for deposit into the Oil, Gas, and
Geothermal Administrative Fund for the purpose of completing workload
requested in the 2010 Budget Act related to the acceleration of the
remediation of orphaned oil facilities shall only be made for a
period of four years.
(b) This section shall remain in effect only until July 1, 2015,
and as of that date is repealed, unless a later enacted statute, that
is enacted before July 1, 2015, deletes or extends that date.
3403. There shall annually be imposed upon the person operating
each gas well in this state, or owning royalty or other interests
with respect to the production from the well, a charge, which shall
be payable to the Treasurer, based upon the amount of gas produced in
the preceding calendar year, other than gas which is used for
recycling or otherwise in oil-producing operations, and which shall
be computed at a uniform rate per ten thousand cubic feet. The charge
shall be apportioned among all of those persons in fractional
amounts proportionate to their respective fractional interests with
respect to the production of the well, but the whole of the charge
shall be payable by the operator, who shall withhold the respective
proportionate shares of the charge from the amounts otherwise payable
or deliverable to the owners of royalty or other interests. In the
case of a penalty for a late payment as provided in Section 3420, no
apportionment shall be made.
3403.5. (a) The Legislature finds that there are underground
storage facilities for gas that utilize depleted or partially
depleted oil or gas reservoirs. Purchased gas, usually from out of
state, is injected for storage and withdrawn during peak load
periods. The supervisor is required to maintain surveillance over
these facilities to insure that the original reserves are not lost,
that drilling of new wells is conducted properly, and that no damage
occurs to the environment by reason of injection and withdrawal of
gas.
(b) In order to help support the regulatory effort of the
supervisor, there shall be imposed an annual charge computed at a
uniform rate based on the number of wells used to inject and withdraw
gas from an underground storage facility during the preceding
calendar year. The charge shall defray the costs incurred by the
state in conducting the activities described in this section.
3404. The charges authorized by this article are in addition to any
and all charges, taxes, assessments, or licenses of any kind or
nature paid by or upon the properties assessed hereunder.
3405. The department shall prescribe the form and contents of all
reports for making the charge or for other purposes to carry out the
intent and provisions of this article, which form shall be mailed in
duplicate to the person assessed under this article.
3406. Every person chargeable under this article, shall on or
before March 15th of each year, file a report with the department.
The report shall show all items of information demanded by the
report, which are necessary to carry out this article. The report
shall be verified by such person or officer as the department may
designate.
3407. The department may, for good cause shown, by order entered
upon its records, extend for not exceeding thirty days, the time for
filing any report required by this article.
3407.5. If the person filing the report required under Section
3406, by error or otherwise fails to include the full amount of oil
or gas production in the report, the department shall make an
estimate of the deficit, based on the monthly production reports
filed by such person under Section 3227, and add it to the report.
The department shall make a reasonable effort to reconcile the yearly
report filed under Section 3406 with the data filed on the regular
monthly production reports, before proceeding to change the report,
but failure to do so shall not invalidate the assessment.
3408. (a) If any person chargeable under this article fails or
refuses to file with the department, within the time prescribed in
this article, the verified report provided for in Section 3406, the
department shall note failure or refusal as provided for in Section
3418.
(b) The department shall estimate the amount of oil and gas
produced by the person and shall assess the person an assessment
based upon the estimated production. A penalty assessment shall be
added to the charge pursuant to Section 3420.
3410. The department shall, on or before June 15th of each year,
acting in conjunction with the Department of Finance, make an
estimate of the amount of money which will be required to carry out
the provisions of this chapter, including any adjustments for savings
or increased expenditures in the current and prior fiscal years.
3412. On or before the 15th of June of each year, the department
shall determine the rate or rates which will produce the sums
necessary to be raised as provided in Section 3410. Within the same
time, the department shall extend into the proper column of the
record of assessments the amount of charges due from each person.
3413. Between the first of March and the 15th of June in each year,
the department shall assess and levy the charges as provided in this
article. The assessment shall be made against the person operating
the property subject to assessment on the first Monday in March,
except that, where the actual operation of any well has changed hands
during the period for which the charge is imposed, the charge shall
be apportioned to each operator upon the basis of the oil or gas
produced during the period, and the lien provided for in Section 3423
shall be a lien against the property of each operator. If the name
of the owner is unknown to the department the assessment shall be
made against unknown owners.
Clerical errors occurring or appearing in the name of any person
whose property is properly assessed and charged, or in the making or
extension of any assessment or charge upon the records, which do not
affect the substantial rights of the payer, shall not invalidate the
assessment or charge.
3417. The notice shall state:
(a) That the assessment of property and levy of charges under this
article has been completed.
(b) That the records of assessments containing the charges due
will be delivered to the State Controller on the first Monday in
July.
(c) That if any person is dissatisfied with the assessment made or
charge fixed by the department he may, at any time before the first
Monday in July, apply to the Controller to have the assessment or
charge corrected in any particular.
The omission to publish notice shall not affect the validity of
any assessment levied pursuant to this article.
3418. The department shall prepare each year a record called the
"Record of Assessments and Charges" in which shall be entered each
assessment and levy or charge made by it upon the property assessed
and charged under this article, describing the property assessed. The
assessments may be classified and entered in such separate parts of
the record as the department may prescribe. If such charges and
assessments become delinquent as provided in Section 3420 of this
code, in addition to the information contained in the "Record of
Assessments and Charges" as herein provided, the department shall
furnish to the State Controller upon his request the name and address
of any owner of property assessed as such name and address last
appears in the office of the tax assessor for county in which such
land or a major portion thereof is situate.
3419. On or before the first of July the department shall deliver
to the State Controller the record of assessments and charges,
certified to by the director, which certificate shall be
substantially as follows: "I, ____, Director of Conservation, do
hereby certify that between the first of March and the first of July,
20__, I made diligent inquiry and examination to ascertain all
property and persons, firms, corporations and associations subject to
assessment as required by the provisions of this chapter, providing
for the assessment and collection of charges; that I have faithfully
complied with all the duties imposed upon me by law; that I have not
imposed any unjust or double assessment through malice or ill will or
otherwise; nor allowed any person, firm, corporation, or
association, or property to escape a just assessment or charge
through favor or regard or otherwise." Failure to subscribe the
certificate to the record of assessments and charges, or any
certificate, shall not affect the validity of any assessment or
charge.
3420. (a) (1) No charges shall be levied for assessments on oil and
gas production of less than ten dollars ($10).
(2) The charges are due and payable on the first of July in each
year for assessments of more than ten dollars ($10), but less than
five hundred dollars ($500). The charges shall be delinquent if not
paid on or before August 15th of each year.
(3) The charges are due and payable on the first of July in each
year for assessments of five hundred dollars ($500) or more. One-half
of the charges shall be delinquent if not paid on or before August
15th of each year. The remaining one-half of the charges shall be
delinquent if not paid on or before the first of February of the
following year.
(b) Any person who fails to pay any charge within the time
required shall pay a penalty of 10 percent of the amount due, plus
interest at the rate of 1 1/2 percent per month, or fraction thereof,
computed from the delinquent date of the assessment until and
including the date of payment.
3421. Every payment on a delinquent charge shall be applied as
follows:
(a) First, to any interest due on the charge.
(b) Second, to any penalty imposed by this part.
(c) The balance, if any, to the charge itself.
3423. (a) If any person fails to pay any charge or penalty imposed
under this chapter at the time that it becomes due and payable, the
amount thereof, including penalties and interest, together with any
costs in addition thereto, shall thereupon be a perfected and
enforceable state tax lien. Such a lien is subject to Chapter 14
(commencing with Section 7150) of Division 7 of Title 1 of the
Government Code.
(b) For the purpose of this section only, "due and payable" means
the date the charges required to be paid pursuant to Section 3420 are
assessed under this chapter.
3423.2. A warrant may be issued by the Controller or his or her
duly authorized representative for the collection of any charges,
interest and penalties and for the enforcement of any such lien
directed to the sheriff and shall have the same effect as a writ of
execution. It may and shall be levied and sale made pursuant to it in
the manner and with the same effect as a levy of and a sale pursuant
to a writ of execution.
3423.3. Notwithstanding any provisions of law to the contrary, the
owner of said land may redeem from any execution sale within a period
of three years upon payment of interest, penalties and charges as
provided in the case of other sales of real property under execution.
3423.4. The sheriff shall receive, upon the completion of his or
her services pursuant to a warrant, and the Controller is authorized
to pay to him or her the same fees and commissions and expenses in
connection with services pursuant to the warrant as are provided by
law for similar services pursuant to a writ of execution; provided,
that fees for publication in a newspaper shall be subject to approval
by the Controller rather than by the court; the fees, commissions,
and expenses shall be an obligation of the person or persons liable
for the payment of the charges and may be collected from the person
or persons by virtue of the warrant or in any other manner provided
in this article for the collection of those charges.
3423.6. In the event that the lien of the charges, penalties or
interest attaches to real property from which the oil or gas is
extracted and more than one parcel of property is included within the
lien, the Controller may release by certificate pursuant to Section
7174 of the Government Code from the lien of said charges, interest,
penalties, and costs, upon payment by the owner of any parcel or
parcels of property of his proportionate share of the assessment of
the oil or gas extracted from all land included within said lien
owned by him.
3423.9. It is expressly provided that the remedies provided herein
of the state shall be cumulative and that no action by the Controller
shall be construed to be an election on the part of the state, or of
any of its officers, to pursue any remedy hereunder to the exclusion
of any other remedy for which provision is made in this article.
3424. All charges assessed and levied shall be paid to the State
Treasurer upon the order of the Controller. The Controller shall
record the payment of any charge.
3425. Errors appearing upon the face of any assessment on the
record of assessments, or overcharges may be corrected by the
Controller, with the consent of the Department of Finance, in such
manner as the Controller and the Department of Finance agree upon.
3426. The Controller shall, on or before the thirtieth day of May
next following the delinquency of any charge, bring an action in the
name of the people of the State, in the county in which the property
assessed is situated, to collect any delinquent charges or
assessments, together with any penalties or costs, which have not
been paid and which are shown as delinquent upon the record of
assessments and charges.
3427. The Attorney General, as provided in section 3102, shall
commence and prosecute any such action to final judgment.
3428. In such actions the record of assessments and charges, or a
copy of so much thereof as is applicable, duly certified by the
Controller, showing unpaid charges against any person assessed by the
department, is prima facie evidence of the assessment, the
delinquency, the amount of charges, penalties, and costs due and
unpaid, that the person is indebted to the people of the State of
California in the amount of charges and penalties therein appearing
unpaid, and that all forms of law in relation to the assessment of
the charges have been complied with.
The provisions of the Code of Civil Procedure relating to service
of summons, pleadings, proofs, trials, and appeals are applicable to
the proceedings.
3429. Payment of the penalties and charges, or the amount of the
judgment recovered in the action, shall be made to the State
Treasurer.
3430. Any person claiming and protesting that the assessment made
or charges assessed against him are void, in whole or in part, may
bring an action against the State Treasurer for the recovery of the
whole or any part of the charges, penalties, or costs paid on such
assessment, upon the grounds stated in his protest. No action may be
brought later than the third Monday in February next following the
day upon which the charges were due, and unless the person has filed
with the State Controller, at the time of payment of the charges, a
written protest stating whether the whole assessment or charge is
claimed to be void, or if a part only, what part, and the grounds
upon which the claim is founded. When so paid under protest the
payment shall not be regarded as voluntary.
3431. Whenever an action is commenced under the provisions of
Section 3430, a copy of the complaint and of the summons shall be
served upon the treasurer or his deputy and upon the supervisor or
his deputy and upon the Attorney General or his deputy. At the time
the treasurer demurs or answers, he may demand that the action be
tried in the Superior Court of the County of Sacramento, which demand
shall be granted.
3432. The Attorney General, as provided in section 3102, shall
defend the action.
The provisions of the Code of Civil Procedure relating to
pleadings, proofs, trials, and appeals are applicable to these
proceedings.
3433. Failure to begin the action within the time specified in
section 3430 is a bar to recovery of the charges. In any such action
the court may render judgment for the plaintiff for any part or
portion of the charge, penalties, or costs found to be void and paid
by plaintiff upon the assessment.
3400. The charges directed to be levied by this article are
necessary in the exercise of the police power of the State and to
provide a means by which to supervise and protect deposits of oil and
gas within the State, in which deposits the people of the State have
a primary and supreme interest.
3401. The proceeds of charges levied, assessed, and collected
pursuant to this article upon the properties of every person
operating or owning an interest in the production of any well shall
be used exclusively for the support and maintenance of the division
of the department charged with the supervision of oil and gas
operations.
3402. There shall annually be imposed upon the person operating
each oil well in this state, or owning royalty or other interests in
respect to the production from the well, a charge which shall be
payable to the Treasurer and which shall be computed at a uniform
rate per barrel of oil produced from the well for the preceding
calendar year. The charge shall be apportioned among all of those
persons in fractional amounts proportionate to their respective
fractional interests in respect to the production of the well, but
the whole of the charge shall be payable by the operator, who shall
withhold their respective proportionate shares of the charge from the
amounts otherwise payable or deliverable to the owners of royalty or
other interests. In the case of a penalty for late payment as
provided in Section 3420, no apportionment shall be made.
3402.3. (a) Any increase by the department in the charge imposed
pursuant to Section 3402 for deposit into the Oil, Gas, and
Geothermal Administrative Fund for the purpose of completing workload
requested in the 2010 Budget Act related to the acceleration of the
remediation of orphaned oil facilities shall only be made for a
period of four years.
(b) This section shall remain in effect only until July 1, 2015,
and as of that date is repealed, unless a later enacted statute, that
is enacted before July 1, 2015, deletes or extends that date.
3403. There shall annually be imposed upon the person operating
each gas well in this state, or owning royalty or other interests
with respect to the production from the well, a charge, which shall
be payable to the Treasurer, based upon the amount of gas produced in
the preceding calendar year, other than gas which is used for
recycling or otherwise in oil-producing operations, and which shall
be computed at a uniform rate per ten thousand cubic feet. The charge
shall be apportioned among all of those persons in fractional
amounts proportionate to their respective fractional interests with
respect to the production of the well, but the whole of the charge
shall be payable by the operator, who shall withhold the respective
proportionate shares of the charge from the amounts otherwise payable
or deliverable to the owners of royalty or other interests. In the
case of a penalty for a late payment as provided in Section 3420, no
apportionment shall be made.
3403.5. (a) The Legislature finds that there are underground
storage facilities for gas that utilize depleted or partially
depleted oil or gas reservoirs. Purchased gas, usually from out of
state, is injected for storage and withdrawn during peak load
periods. The supervisor is required to maintain surveillance over
these facilities to insure that the original reserves are not lost,
that drilling of new wells is conducted properly, and that no damage
occurs to the environment by reason of injection and withdrawal of
gas.
(b) In order to help support the regulatory effort of the
supervisor, there shall be imposed an annual charge computed at a
uniform rate based on the number of wells used to inject and withdraw
gas from an underground storage facility during the preceding
calendar year. The charge shall defray the costs incurred by the
state in conducting the activities described in this section.
3404. The charges authorized by this article are in addition to any
and all charges, taxes, assessments, or licenses of any kind or
nature paid by or upon the properties assessed hereunder.
3405. The department shall prescribe the form and contents of all
reports for making the charge or for other purposes to carry out the
intent and provisions of this article, which form shall be mailed in
duplicate to the person assessed under this article.
3406. Every person chargeable under this article, shall on or
before March 15th of each year, file a report with the department.
The report shall show all items of information demanded by the
report, which are necessary to carry out this article. The report
shall be verified by such person or officer as the department may
designate.
3407. The department may, for good cause shown, by order entered
upon its records, extend for not exceeding thirty days, the time for
filing any report required by this article.
3407.5. If the person filing the report required under Section
3406, by error or otherwise fails to include the full amount of oil
or gas production in the report, the department shall make an
estimate of the deficit, based on the monthly production reports
filed by such person under Section 3227, and add it to the report.
The department shall make a reasonable effort to reconcile the yearly
report filed under Section 3406 with the data filed on the regular
monthly production reports, before proceeding to change the report,
but failure to do so shall not invalidate the assessment.
3408. (a) If any person chargeable under this article fails or
refuses to file with the department, within the time prescribed in
this article, the verified report provided for in Section 3406, the
department shall note failure or refusal as provided for in Section
3418.
(b) The department shall estimate the amount of oil and gas
produced by the person and shall assess the person an assessment
based upon the estimated production. A penalty assessment shall be
added to the charge pursuant to Section 3420.
3410. The department shall, on or before June 15th of each year,
acting in conjunction with the Department of Finance, make an
estimate of the amount of money which will be required to carry out
the provisions of this chapter, including any adjustments for savings
or increased expenditures in the current and prior fiscal years.
3412. On or before the 15th of June of each year, the department
shall determine the rate or rates which will produce the sums
necessary to be raised as provided in Section 3410. Within the same
time, the department shall extend into the proper column of the
record of assessments the amount of charges due from each person.
3413. Between the first of March and the 15th of June in each year,
the department shall assess and levy the charges as provided in this
article. The assessment shall be made against the person operating
the property subject to assessment on the first Monday in March,
except that, where the actual operation of any well has changed hands
during the period for which the charge is imposed, the charge shall
be apportioned to each operator upon the basis of the oil or gas
produced during the period, and the lien provided for in Section 3423
shall be a lien against the property of each operator. If the name
of the owner is unknown to the department the assessment shall be
made against unknown owners.
Clerical errors occurring or appearing in the name of any person
whose property is properly assessed and charged, or in the making or
extension of any assessment or charge upon the records, which do not
affect the substantial rights of the payer, shall not invalidate the
assessment or charge.
3417. The notice shall state:
(a) That the assessment of property and levy of charges under this
article has been completed.
(b) That the records of assessments containing the charges due
will be delivered to the State Controller on the first Monday in
July.
(c) That if any person is dissatisfied with the assessment made or
charge fixed by the department he may, at any time before the first
Monday in July, apply to the Controller to have the assessment or
charge corrected in any particular.
The omission to publish notice shall not affect the validity of
any assessment levied pursuant to this article.
3418. The department shall prepare each year a record called the
"Record of Assessments and Charges" in which shall be entered each
assessment and levy or charge made by it upon the property assessed
and charged under this article, describing the property assessed. The
assessments may be classified and entered in such separate parts of
the record as the department may prescribe. If such charges and
assessments become delinquent as provided in Section 3420 of this
code, in addition to the information contained in the "Record of
Assessments and Charges" as herein provided, the department shall
furnish to the State Controller upon his request the name and address
of any owner of property assessed as such name and address last
appears in the office of the tax assessor for county in which such
land or a major portion thereof is situate.
3419. On or before the first of July the department shall deliver
to the State Controller the record of assessments and charges,
certified to by the director, which certificate shall be
substantially as follows: "I, ____, Director of Conservation, do
hereby certify that between the first of March and the first of July,
20__, I made diligent inquiry and examination to ascertain all
property and persons, firms, corporations and associations subject to
assessment as required by the provisions of this chapter, providing
for the assessment and collection of charges; that I have faithfully
complied with all the duties imposed upon me by law; that I have not
imposed any unjust or double assessment through malice or ill will or
otherwise; nor allowed any person, firm, corporation, or
association, or property to escape a just assessment or charge
through favor or regard or otherwise." Failure to subscribe the
certificate to the record of assessments and charges, or any
certificate, shall not affect the validity of any assessment or
charge.
3420. (a) (1) No charges shall be levied for assessments on oil and
gas production of less than ten dollars ($10).
(2) The charges are due and payable on the first of July in each
year for assessments of more than ten dollars ($10), but less than
five hundred dollars ($500). The charges shall be delinquent if not
paid on or before August 15th of each year.
(3) The charges are due and payable on the first of July in each
year for assessments of five hundred dollars ($500) or more. One-half
of the charges shall be delinquent if not paid on or before August
15th of each year. The remaining one-half of the charges shall be
delinquent if not paid on or before the first of February of the
following year.
(b) Any person who fails to pay any charge within the time
required shall pay a penalty of 10 percent of the amount due, plus
interest at the rate of 1 1/2 percent per month, or fraction thereof,
computed from the delinquent date of the assessment until and
including the date of payment.
3421. Every payment on a delinquent charge shall be applied as
follows:
(a) First, to any interest due on the charge.
(b) Second, to any penalty imposed by this part.
(c) The balance, if any, to the charge itself.
3423. (a) If any person fails to pay any charge or penalty imposed
under this chapter at the time that it becomes due and payable, the
amount thereof, including penalties and interest, together with any
costs in addition thereto, shall thereupon be a perfected and
enforceable state tax lien. Such a lien is subject to Chapter 14
(commencing with Section 7150) of Division 7 of Title 1 of the
Government Code.
(b) For the purpose of this section only, "due and payable" means
the date the charges required to be paid pursuant to Section 3420 are
assessed under this chapter.
3423.2. A warrant may be issued by the Controller or his or her
duly authorized representative for the collection of any charges,
interest and penalties and for the enforcement of any such lien
directed to the sheriff and shall have the same effect as a writ of
execution. It may and shall be levied and sale made pursuant to it in
the manner and with the same effect as a levy of and a sale pursuant
to a writ of execution.
3423.3. Notwithstanding any provisions of law to the contrary, the
owner of said land may redeem from any execution sale within a period
of three years upon payment of interest, penalties and charges as
provided in the case of other sales of real property under execution.
3423.4. The sheriff shall receive, upon the completion of his or
her services pursuant to a warrant, and the Controller is authorized
to pay to him or her the same fees and commissions and expenses in
connection with services pursuant to the warrant as are provided by
law for similar services pursuant to a writ of execution; provided,
that fees for publication in a newspaper shall be subject to approval
by the Controller rather than by the court; the fees, commissions,
and expenses shall be an obligation of the person or persons liable
for the payment of the charges and may be collected from the person
or persons by virtue of the warrant or in any other manner provided
in this article for the collection of those charges.
3423.6. In the event that the lien of the charges, penalties or
interest attaches to real property from which the oil or gas is
extracted and more than one parcel of property is included within the
lien, the Controller may release by certificate pursuant to Section
7174 of the Government Code from the lien of said charges, interest,
penalties, and costs, upon payment by the owner of any parcel or
parcels of property of his proportionate share of the assessment of
the oil or gas extracted from all land included within said lien
owned by him.
3423.9. It is expressly provided that the remedies provided herein
of the state shall be cumulative and that no action by the Controller
shall be construed to be an election on the part of the state, or of
any of its officers, to pursue any remedy hereunder to the exclusion
of any other remedy for which provision is made in this article.
3424. All charges assessed and levied shall be paid to the State
Treasurer upon the order of the Controller. The Controller shall
record the payment of any charge.
3425. Errors appearing upon the face of any assessment on the
record of assessments, or overcharges may be corrected by the
Controller, with the consent of the Department of Finance, in such
manner as the Controller and the Department of Finance agree upon.
3426. The Controller shall, on or before the thirtieth day of May
next following the delinquency of any charge, bring an action in the
name of the people of the State, in the county in which the property
assessed is situated, to collect any delinquent charges or
assessments, together with any penalties or costs, which have not
been paid and which are shown as delinquent upon the record of
assessments and charges.
3427. The Attorney General, as provided in section 3102, shall
commence and prosecute any such action to final judgment.
3428. In such actions the record of assessments and charges, or a
copy of so much thereof as is applicable, duly certified by the
Controller, showing unpaid charges against any person assessed by the
department, is prima facie evidence of the assessment, the
delinquency, the amount of charges, penalties, and costs due and
unpaid, that the person is indebted to the people of the State of
California in the amount of charges and penalties therein appearing
unpaid, and that all forms of law in relation to the assessment of
the charges have been complied with.
The provisions of the Code of Civil Procedure relating to service
of summons, pleadings, proofs, trials, and appeals are applicable to
the proceedings.
3429. Payment of the penalties and charges, or the amount of the
judgment recovered in the action, shall be made to the State
Treasurer.
3430. Any person claiming and protesting that the assessment made
or charges assessed against him are void, in whole or in part, may
bring an action against the State Treasurer for the recovery of the
whole or any part of the charges, penalties, or costs paid on such
assessment, upon the grounds stated in his protest. No action may be
brought later than the third Monday in February next following the
day upon which the charges were due, and unless the person has filed
with the State Controller, at the time of payment of the charges, a
written protest stating whether the whole assessment or charge is
claimed to be void, or if a part only, what part, and the grounds
upon which the claim is founded. When so paid under protest the
payment shall not be regarded as voluntary.
3431. Whenever an action is commenced under the provisions of
Section 3430, a copy of the complaint and of the summons shall be
served upon the treasurer or his deputy and upon the supervisor or
his deputy and upon the Attorney General or his deputy. At the time
the treasurer demurs or answers, he may demand that the action be
tried in the Superior Court of the County of Sacramento, which demand
shall be granted.
3432. The Attorney General, as provided in section 3102, shall
defend the action.
The provisions of the Code of Civil Procedure relating to
pleadings, proofs, trials, and appeals are applicable to these
proceedings.
3433. Failure to begin the action within the time specified in
section 3430 is a bar to recovery of the charges. In any such action
the court may render judgment for the plaintiff for any part or
portion of the charge, penalties, or costs found to be void and paid
by plaintiff upon the assessment.
3400. The charges directed to be levied by this article are
necessary in the exercise of the police power of the State and to
provide a means by which to supervise and protect deposits of oil and
gas within the State, in which deposits the people of the State have
a primary and supreme interest.
3401. The proceeds of charges levied, assessed, and collected
pursuant to this article upon the properties of every person
operating or owning an interest in the production of any well shall
be used exclusively for the support and maintenance of the division
of the department charged with the supervision of oil and gas
operations.
3402. There shall annually be imposed upon the person operating
each oil well in this state, or owning royalty or other interests in
respect to the production from the well, a charge which shall be
payable to the Treasurer and which shall be computed at a uniform
rate per barrel of oil produced from the well for the preceding
calendar year. The charge shall be apportioned among all of those
persons in fractional amounts proportionate to their respective
fractional interests in respect to the production of the well, but
the whole of the charge shall be payable by the operator, who shall
withhold their respective proportionate shares of the charge from the
amounts otherwise payable or deliverable to the owners of royalty or
other interests. In the case of a penalty for late payment as
provided in Section 3420, no apportionment shall be made.
3402.3. (a) Any increase by the department in the charge imposed
pursuant to Section 3402 for deposit into the Oil, Gas, and
Geothermal Administrative Fund for the purpose of completing workload
requested in the 2010 Budget Act related to the acceleration of the
remediation of orphaned oil facilities shall only be made for a
period of four years.
(b) This section shall remain in effect only until July 1, 2015,
and as of that date is repealed, unless a later enacted statute, that
is enacted before July 1, 2015, deletes or extends that date.
3403. There shall annually be imposed upon the person operating
each gas well in this state, or owning royalty or other interests
with respect to the production from the well, a charge, which shall
be payable to the Treasurer, based upon the amount of gas produced in
the preceding calendar year, other than gas which is used for
recycling or otherwise in oil-producing operations, and which shall
be computed at a uniform rate per ten thousand cubic feet. The charge
shall be apportioned among all of those persons in fractional
amounts proportionate to their respective fractional interests with
respect to the production of the well, but the whole of the charge
shall be payable by the operator, who shall withhold the respective
proportionate shares of the charge from the amounts otherwise payable
or deliverable to the owners of royalty or other interests. In the
case of a penalty for a late payment as provided in Section 3420, no
apportionment shall be made.
3403.5. (a) The Legislature finds that there are underground
storage facilities for gas that utilize depleted or partially
depleted oil or gas reservoirs. Purchased gas, usually from out of
state, is injected for storage and withdrawn during peak load
periods. The supervisor is required to maintain surveillance over
these facilities to insure that the original reserves are not lost,
that drilling of new wells is conducted properly, and that no damage
occurs to the environment by reason of injection and withdrawal of
gas.
(b) In order to help support the regulatory effort of the
supervisor, there shall be imposed an annual charge computed at a
uniform rate based on the number of wells used to inject and withdraw
gas from an underground storage facility during the preceding
calendar year. The charge shall defray the costs incurred by the
state in conducting the activities described in this section.
3404. The charges authorized by this article are in addition to any
and all charges, taxes, assessments, or licenses of any kind or
nature paid by or upon the properties assessed hereunder.
3405. The department shall prescribe the form and contents of all
reports for making the charge or for other purposes to carry out the
intent and provisions of this article, which form shall be mailed in
duplicate to the person assessed under this article.
3406. Every person chargeable under this article, shall on or
before March 15th of each year, file a report with the department.
The report shall show all items of information demanded by the
report, which are necessary to carry out this article. The report
shall be verified by such person or officer as the department may
designate.
3407. The department may, for good cause shown, by order entered
upon its records, extend for not exceeding thirty days, the time for
filing any report required by this article.
3407.5. If the person filing the report required under Section
3406, by error or otherwise fails to include the full amount of oil
or gas production in the report, the department shall make an
estimate of the deficit, based on the monthly production reports
filed by such person under Section 3227, and add it to the report.
The department shall make a reasonable effort to reconcile the yearly
report filed under Section 3406 with the data filed on the regular
monthly production reports, before proceeding to change the report,
but failure to do so shall not invalidate the assessment.
3408. (a) If any person chargeable under this article fails or
refuses to file with the department, within the time prescribed in
this article, the verified report provided for in Section 3406, the
department shall note failure or refusal as provided for in Section
3418.
(b) The department shall estimate the amount of oil and gas
produced by the person and shall assess the person an assessment
based upon the estimated production. A penalty assessment shall be
added to the charge pursuant to Section 3420.
3410. The department shall, on or before June 15th of each year,
acting in conjunction with the Department of Finance, make an
estimate of the amount of money which will be required to carry out
the provisions of this chapter, including any adjustments for savings
or increased expenditures in the current and prior fiscal years.
3412. On or before the 15th of June of each year, the department
shall determine the rate or rates which will produce the sums
necessary to be raised as provided in Section 3410. Within the same
time, the department shall extend into the proper column of the
record of assessments the amount of charges due from each person.
3413. Between the first of March and the 15th of June in each year,
the department shall assess and levy the charges as provided in this
article. The assessment shall be made against the person operating
the property subject to assessment on the first Monday in March,
except that, where the actual operation of any well has changed hands
during the period for which the charge is imposed, the charge shall
be apportioned to each operator upon the basis of the oil or gas
produced during the period, and the lien provided for in Section 3423
shall be a lien against the property of each operator. If the name
of the owner is unknown to the department the assessment shall be
made against unknown owners.
Clerical errors occurring or appearing in the name of any person
whose property is properly assessed and charged, or in the making or
extension of any assessment or charge upon the records, which do not
affect the substantial rights of the payer, shall not invalidate the
assessment or charge.
3417. The notice shall state:
(a) That the assessment of property and levy of charges under this
article has been completed.
(b) That the records of assessments containing the charges due
will be delivered to the State Controller on the first Monday in
July.
(c) That if any person is dissatisfied with the assessment made or
charge fixed by the department he may, at any time before the first
Monday in July, apply to the Controller to have the assessment or
charge corrected in any particular.
The omission to publish notice shall not affect the validity of
any assessment levied pursuant to this article.
3418. The department shall prepare each year a record called the
"Record of Assessments and Charges" in which shall be entered each
assessment and levy or charge made by it upon the property assessed
and charged under this article, describing the property assessed. The
assessments may be classified and entered in such separate parts of
the record as the department may prescribe. If such charges and
assessments become delinquent as provided in Section 3420 of this
code, in addition to the information contained in the "Record of
Assessments and Charges" as herein provided, the department shall
furnish to the State Controller upon his request the name and address
of any owner of property assessed as such name and address last
appears in the office of the tax assessor for county in which such
land or a major portion thereof is situate.
3419. On or before the first of July the department shall deliver
to the State Controller the record of assessments and charges,
certified to by the director, which certificate shall be
substantially as follows: "I, ____, Director of Conservation, do
hereby certify that between the first of March and the first of July,
20__, I made diligent inquiry and examination to ascertain all
property and persons, firms, corporations and associations subject to
assessment as required by the provisions of this chapter, providing
for the assessment and collection of charges; that I have faithfully
complied with all the duties imposed upon me by law; that I have not
imposed any unjust or double assessment through malice or ill will or
otherwise; nor allowed any person, firm, corporation, or
association, or property to escape a just assessment or charge
through favor or regard or otherwise." Failure to subscribe the
certificate to the record of assessments and charges, or any
certificate, shall not affect the validity of any assessment or
charge.
3420. (a) (1) No charges shall be levied for assessments on oil and
gas production of less than ten dollars ($10).
(2) The charges are due and payable on the first of July in each
year for assessments of more than ten dollars ($10), but less than
five hundred dollars ($500). The charges shall be delinquent if not
paid on or before August 15th of each year.
(3) The charges are due and payable on the first of July in each
year for assessments of five hundred dollars ($500) or more. One-half
of the charges shall be delinquent if not paid on or before August
15th of each year. The remaining one-half of the charges shall be
delinquent if not paid on or before the first of February of the
following year.
(b) Any person who fails to pay any charge within the time
required shall pay a penalty of 10 percent of the amount due, plus
interest at the rate of 1 1/2 percent per month, or fraction thereof,
computed from the delinquent date of the assessment until and
including the date of payment.
3421. Every payment on a delinquent charge shall be applied as
follows:
(a) First, to any interest due on the charge.
(b) Second, to any penalty imposed by this part.
(c) The balance, if any, to the charge itself.
3423. (a) If any person fails to pay any charge or penalty imposed
under this chapter at the time that it becomes due and payable, the
amount thereof, including penalties and interest, together with any
costs in addition thereto, shall thereupon be a perfected and
enforceable state tax lien. Such a lien is subject to Chapter 14
(commencing with Section 7150) of Division 7 of Title 1 of the
Government Code.
(b) For the purpose of this section only, "due and payable" means
the date the charges required to be paid pursuant to Section 3420 are
assessed under this chapter.
3423.2. A warrant may be issued by the Controller or his or her
duly authorized representative for the collection of any charges,
interest and penalties and for the enforcement of any such lien
directed to the sheriff and shall have the same effect as a writ of
execution. It may and shall be levied and sale made pursuant to it in
the manner and with the same effect as a levy of and a sale pursuant
to a writ of execution.
3423.3. Notwithstanding any provisions of law to the contrary, the
owner of said land may redeem from any execution sale within a period
of three years upon payment of interest, penalties and charges as
provided in the case of other sales of real property under execution.
3423.4. The sheriff shall receive, upon the completion of his or
her services pursuant to a warrant, and the Controller is authorized
to pay to him or her the same fees and commissions and expenses in
connection with services pursuant to the warrant as are provided by
law for similar services pursuant to a writ of execution; provided,
that fees for publication in a newspaper shall be subject to approval
by the Controller rather than by the court; the fees, commissions,
and expenses shall be an obligation of the person or persons liable
for the payment of the charges and may be collected from the person
or persons by virtue of the warrant or in any other manner provided
in this article for the collection of those charges.
3423.6. In the event that the lien of the charges, penalties or
interest attaches to real property from which the oil or gas is
extracted and more than one parcel of property is included within the
lien, the Controller may release by certificate pursuant to Section
7174 of the Government Code from the lien of said charges, interest,
penalties, and costs, upon payment by the owner of any parcel or
parcels of property of his proportionate share of the assessment of
the oil or gas extracted from all land included within said lien
owned by him.
3423.9. It is expressly provided that the remedies provided herein
of the state shall be cumulative and that no action by the Controller
shall be construed to be an election on the part of the state, or of
any of its officers, to pursue any remedy hereunder to the exclusion
of any other remedy for which provision is made in this article.
3424. All charges assessed and levied shall be paid to the State
Treasurer upon the order of the Controller. The Controller shall
record the payment of any charge.
3425. Errors appearing upon the face of any assessment on the
record of assessments, or overcharges may be corrected by the
Controller, with the consent of the Department of Finance, in such
manner as the Controller and the Department of Finance agree upon.
3426. The Controller shall, on or before the thirtieth day of May
next following the delinquency of any charge, bring an action in the
name of the people of the State, in the county in which the property
assessed is situated, to collect any delinquent charges or
assessments, together with any penalties or costs, which have not
been paid and which are shown as delinquent upon the record of
assessments and charges.
3427. The Attorney General, as provided in section 3102, shall
commence and prosecute any such action to final judgment.
3428. In such actions the record of assessments and charges, or a
copy of so much thereof as is applicable, duly certified by the
Controller, showing unpaid charges against any person assessed by the
department, is prima facie evidence of the assessment, the
delinquency, the amount of charges, penalties, and costs due and
unpaid, that the person is indebted to the people of the State of
California in the amount of charges and penalties therein appearing
unpaid, and that all forms of law in relation to the assessment of
the charges have been complied with.
The provisions of the Code of Civil Procedure relating to service
of summons, pleadings, proofs, trials, and appeals are applicable to
the proceedings.
3429. Payment of the penalties and charges, or the amount of the
judgment recovered in the action, shall be made to the State
Treasurer.
3430. Any person claiming and protesting that the assessment made
or charges assessed against him are void, in whole or in part, may
bring an action against the State Treasurer for the recovery of the
whole or any part of the charges, penalties, or costs paid on such
assessment, upon the grounds stated in his protest. No action may be
brought later than the third Monday in February next following the
day upon which the charges were due, and unless the person has filed
with the State Controller, at the time of payment of the charges, a
written protest stating whether the whole assessment or charge is
claimed to be void, or if a part only, what part, and the grounds
upon which the claim is founded. When so paid under protest the
payment shall not be regarded as voluntary.
3431. Whenever an action is commenced under the provisions of
Section 3430, a copy of the complaint and of the summons shall be
served upon the treasurer or his deputy and upon the supervisor or
his deputy and upon the Attorney General or his deputy. At the time
the treasurer demurs or answers, he may demand that the action be
tried in the Superior Court of the County of Sacramento, which demand
shall be granted.
3432. The Attorney General, as provided in section 3102, shall
defend the action.
The provisions of the Code of Civil Procedure relating to
pleadings, proofs, trials, and appeals are applicable to these
proceedings.
3433. Failure to begin the action within the time specified in
section 3430 is a bar to recovery of the charges. In any such action
the court may render judgment for the plaintiff for any part or
portion of the charge, penalties, or costs found to be void and paid
by plaintiff upon the assessment.
