ARTICLE 7. Assessment and Collection of Charges [3400. - 3434.]

Cal. Public Resources Code - PRC 7.
in effect

Cal. Public Resources Code - PRC § 3400. Section 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.

Cal. Public Resources Code - PRC § 3401. Section 3401.

(a) 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 a well shall be used exclusively for the support and maintenance of the department charged with the supervision of oil and gas operations, for the State Water Resources Control Board and the regional water quality control boards for their activities related to oil and gas operations that may affect water resources, and for the support of the State Air Resources Board and the Office of Environmental Health Hazard Assessment for their activities related to oil and gas operations that may affect air quality, public health, or public safety. (b) Notwithstanding subdivision (a), 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 a well undergoing a well stimulation treatment, may be used by public entities, subject to appropriation by the Legislature, for all costs associated with both of the following: (1) Well stimulation treatments, including rulemaking and scientific studies required to evaluate the treatment, inspections, any air and water quality sampling, monitoring, and testing performed by public entities. (2) The costs of the State Water Resources Control Board and the regional water quality control boards in carrying out their responsibilities pursuant to Section 3160 and Section 10783 of the Water Code.

Cal. Public Resources Code - PRC § 3402. Section 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.

Cal. Public Resources Code - PRC § 3403. Section 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.

Cal. Public Resources Code - PRC § 3403.5. Section 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 ensure 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 on operators of underground gas storage facilities to defray the regulatory costs incurred by the state in conducting the activities described in subdivision (a). Each underground gas storage facility operator shall pay a proportionate share of the total regulatory costs projected for each fiscal year based on the field capacity and number of wells for each underground gas storage facility. For each underground gas storage facility, the portion owed by the operator shall be computed by multiplying the operator’s field capacity by the number of the operator’s wells, and dividing that product by the statewide sum across all underground gas storage facilities of the product of the field capacity of each individual underground gas storage facility multiplied by the number of wells at that facility. (c) In order to defray the costs of the response effort of the division in the event of a large, uncontrolled release of gas from an underground storage facility that poses a significant present or potential hazard to public health and safety, property, or to the environment, there shall be an additional charge imposed entirely on the operator of the underground storage facility at which the uncontrolled leak or release of gas occurred. The charge shall be in the amount of the total directly associated costs incurred by the division in the previous calendar year in the course of responding to the release, including personnel hours, travel expenses, contracting costs, and any other directly associated costs incurred by the division. (d) For purposes of this section, the following terms have the following meanings: (1) “Field capacity” means the total gas storage capacity, including base and working gas capacity, of an underground gas storage facility, in cubic feet. (2) “Wells” means all wells associated with an underground gas storage facility except those that have been plugged and abandoned pursuant to Section 3208 before the preceding calendar year.

Cal. Public Resources Code - PRC § 3403.6. Section 3403.6.

(a) For the purposes of this section, “gravity-based energy storage well” has the same meaning as set forth in Section 3190. (b) To support the regulatory effort of the supervisor, there shall be imposed an annual charge on operators of gravity-based energy storage wells to defray the regulatory costs incurred by the state in maintaining surveillance of these wells, ensuring that testing is conducted properly, and ensuring that no damage occurs to the environment by reason of conversion. Each gravity-based energy storage well operator shall pay a proportionate share of the total regulatory costs for each fiscal year based on the operator’s number of gravity-based energy storage wells. For each gravity-based energy storage well, the portion owed by the operator shall be computed by dividing the statewide sum of reasonably incurred regulatory costs across all gravity-based energy source wells by the number of gravity-based energy storage wells. (c) This section shall remain in effect only until January 1, 2035, and as of that date is repealed.

Cal. Public Resources Code - PRC § 3404. 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.

Cal. Public Resources Code - PRC § 3405. Section 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.

Cal. Public Resources Code - PRC § 3406. Section 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.

Cal. Public Resources Code - PRC § 3407. Section 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.

Cal. Public Resources Code - PRC § 3407.5. Section 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.

Cal. Public Resources Code - PRC § 3408. Section 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.

Cal. Public Resources Code - PRC § 3410. Section 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.

Cal. Public Resources Code - PRC § 3412. Section 3412.

On or before June 15 of each year, the department shall determine the rate or rates that 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. The department shall post the information supporting the rate or rates on a publicly available portion of its internet website.

Cal. Public Resources Code - PRC § 3413. Section 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.

Cal. Public Resources Code - PRC § 3417. Section 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.

Cal. Public Resources Code - PRC § 3417.5. Section 3417.5.

(a) The division shall send a notice to each operator subject to a fee pursuant to Section 3206 by April 1 of each year. The notice shall do both of the following: (1) Identify the amount of the annual fee due no later than May 1 of that year. (2) State that if the fee amount in the notice is in error, the operator may apply to the division before May 1 of that year to have the fee amount corrected. (b) The failure to send a notice shall not affect the validity or amount of the fee owed pursuant to Section 3206. (c) The notice shall be sent by mail or by electronic means deemed appropriate by the division, including, but not limited to, electronic mail or an alternative electronic system that persons opt into for receiving notice.

Cal. Public Resources Code - PRC § 3418. Section 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.

Cal. Public Resources Code - PRC § 3419. Section 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.

Cal. Public Resources Code - PRC § 3420. Section 3420.

(a) (1) No charges shall be levied for assessments on oil and gas production of less than ten dollars ($10). (2) The charges levied for assessments 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 levied for assessments 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) Idle well fee charges pursuant to Section 3206 are due and payable as specified pursuant to that section and are immediately delinquent if not paid as required. (c) Charges to an operator pursuant to Section 3226 for actual or estimated costs to perform work ordered are delinquent if not paid within 30 days after service of the accounting of costs. (d) 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, idle well fee, or other charge pursuant to this chapter until and including the date of payment.

Cal. Public Resources Code - PRC § 3421. Section 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.

Cal. Public Resources Code - PRC § 3423. Section 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.

Cal. Public Resources Code - PRC § 3423.2. Section 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.

Cal. Public Resources Code - PRC § 3423.3. Section 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.

Cal. Public Resources Code - PRC § 3423.4. Section 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.

Cal. Public Resources Code - PRC § 3423.6. Section 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.

Cal. Public Resources Code - PRC § 3423.9. Section 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.

Cal. Public Resources Code - PRC § 3424. Section 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.

Cal. Public Resources Code - PRC § 3425. Section 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.

Cal. Public Resources Code - PRC § 3426. Section 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.

Cal. Public Resources Code - PRC § 3428. Section 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.

Cal. Public Resources Code - PRC § 3430. Section 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.

Cal. Public Resources Code - PRC § 3431. Section 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.

Cal. Public Resources Code - PRC § 3432. Section 3432.

(a) The Attorney General shall defend the action. (b) The provisions of the Code of Civil Procedure relating to pleadings, proofs, trials, and appeals are applicable to these proceedings.

Cal. Public Resources Code - PRC § 3433. Section 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.

Cal. Public Resources Code - PRC § 3434. Section 3434.

(a) If the department determines between June 15, 2024, and March 1, 2025, that the estimate made pursuant to Section 3410 of the amount of money that will be required to carry out the provisions of this chapter is insufficient for the current fiscal year, the department may assess and levy a supplemental assessment on oil and gas production to ensure that funds are available for the full amount of the adjusted cost estimate. The department shall not issue a supplemental assessment pursuant to this section after March 1, 2025. (b) Issuance of a supplemental assessment shall not affect the requirements and authorities for collecting unpaid assessments on oil and gas pursuant to this article. If the total amount collected under the assessment and any supplemental assessments exceed the total amount required to carry out the provisions of this chapter for the fiscal year, the excess shall be carried forward to reduce the assessment for the following year as an adjustment for savings pursuant to Section 3410. (c) If a supplemental assessment is issued pursuant to this section, the charges shall be computed in accordance with Sections 3402 and 3403, and the supplemental assessment shall be issued and collected in accordance with the requirements and authorities of this article with the following exceptions: (1) The department shall not assess and levy a supplemental assessment until at least 15 days after mailing notice of a pending supplemental assessment to each person subject to assessment pursuant to Section 3413. The requirement to assess and levy charges between March 1 and June 15 pursuant to Section 3413 does not apply to a supplemental assessment, but the department shall otherwise assess and levy the supplemental assessment in accordance with Section 3418. (2) The department shall provide the Controller with an update to the “Record of Assessments and Charges” required pursuant to Section 3418 to include the supplemental assessment. (3) The certificate delivered to the Controller in the previous year pursuant to Section 3419 may be relied upon for a supplemental assessment and an additional certificate is not required. (4) Notwithstanding subdivision (a) of Section 3420, charges under a supplemental assessment are due and payable 15 days after the assessment is mailed and shall be delinquent if not paid within 90 days after it is due and payable. Penalties described in subdivision (d) of Section 3420 shall apply to delinquent charges under a supplemental assessment. (5) The Controller’s collection action pursuant to Section 3426 for charges under a supplemental assessment shall be brought within 120 days after the charge under the supplemental assessment becomes delinquent. (6) An action pursuant to Section 3430 for the recovery of the whole, or any part of, the charges, penalties, or costs paid on a supplemental assessment pursuant to this section may be brought no later than the third Monday following the day upon which the charges became delinquent. The requirements of Section 3430 shall otherwise apply to an action for the recovery of the whole or any part of the charges, penalties, or costs paid on a supplemental assessment pursuant to this section. (d) This section shall remain in effect only until January 1, 2027, and as of that date is repealed. (e) Notwithstanding subdivision (d), the department may continue to pursue the collection of unpaid supplemental assessments, penalties, and interest after this section is repealed.
Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026

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