By using an Axon Enterprise, Inc. (“Axon”) desktop software (“Software”), you indicate your agreement to the terms of this License Agreement (“Agreement”). Axon owns the Software, all executable instructions, images, icons, sound, and text incorporated in the Software. United States copyright laws and international treaty provisions protect Axon’s ownership of the Software. Except to the extent expressly licensed in this Agreement, all rights are reserved to Axon.
USE OF THE SOFTWARE IS SUBJECT TO THE TERMS SET FORTH BELOW. USING THE SOFTWARE INDICATES YOUR ACCEPTANCE OF THESE TERMS. IF YOU DO NOT ACCEPT THESE TERMS, YOU MAY NOT COPY OR USE THE SOFTWARE.
1. License Grant. Axon grants to you a non-exclusive, royalty-free, worldwide right and license to use the Software, where “use” and “using” in this Agreement mean storing, loading, installing, or executing the Software exclusively for data communication with an Axon product. You may use the Software in a networked environment on computers other than the computer on which the Software is installed if each execution of the Software is for data communication with an Axon product. You may make copies and adaptations of the Software for archival purposes and when copying or adaptation is an essential step in the authorized use of the Software if you retain all copyright, trademark, and proprietary notices in the original Software on all copies or adaptations.
You may copy the written materials accompanying the Software.
2. Prohibited Acts. You may not modify the Software or disable any licensing or control features of the Software. You may not rent or lease your rights to the Software or documentation. You may not reverse engineer the Software to obtain source code. The license does not include a grant of any right to use source code obtained or devised as a result of reverse engineering. The license grant does not include a grant of any right under any patent or trademark of Axon.
3. Ownership. Except provided in this Agreement, all rights to the Software belong to Axon.
Your license confers neither title to nor ownership in the Software and is not a sale of any rights in Axon. Axon owns and reserves all right, title, and interest in the Software, including any suggestions to Axon. Axon has and claims proprietary rights in the Software, and integration of ancillary materials, knowledge, and designs constituting Axon products and services. You will not directly or indirectly cause any Axon proprietary rights to be violated.
4. License Restrictions. You may not use the Software in any manner or for any purpose other than as expressly permitted by this Agreement. You may not: (a) modify, alter, tamper with, repair, or otherwise create derivative works of the Software; (b) reverse engineer, disassemble, or decompile the Software or apply any other process or procedure to derive the source code of the Software, or allow any others to do the same; (c) access or use the Software in a way intended to avoid incurring fees or exceeding usage limits or quotas; (d) copy the Software in whole or part, except as expressly permitted in this Agreement; (e) use trade secret information contained in the Software, except as expressly permitted in this Agreement; (f) resell, rent, loan or sublicense the Software; (g) access the Software in order to build a competitive product or service or copy any features, functions or graphics of the Software; or (h) remove, alter or obscure any confidentiality or proprietary rights notices (including copyright and trademark notices) of Axon or our licensors on or within the Software or any copies of the Software. All licenses granted to you in this Agreement are conditional on your continued compliance with this Agreement, and will immediately and automatically terminate if you do not comply with any term or condition of this Agreement. During the term of your use of the Software and after, you will not assert, nor will you authorize, assist, or encourage any third party to assert, against us or any of our affiliates, customers, vendors, business partners, or licensors, any patent infringement or other intellectual A AXON
Title: Axon Desktop Software End User License Agreement Department: Legal
Version: 1.0
Release Date: 11/26/2018
Desktop Software End User License Agreement
property infringement claim regarding the Software.
5. Support. Axon may make available to you updates and error corrections (collectively, "Updates") to the Software. Axon may provide Updates electronically via the Internet or via media as determined solely by Axon. It is your responsibility to establish and maintain adequate access to the Internet in order to receive the updates. Axon does not provide Internet Service Provider (ISP) services. You are responsible for maintaining the computer equipment necessary for your use of the Software. At its sole discretion, Axon may provide technical support for the current and prior release(s)/version(s) of the Software for a period of six (6) months following the date the Axon makes the subsequent release/version generally available.
6. Disclaimers. AXON PROVIDES THE SOFTWARE “AS IS.” AXON AND OUR AFFILIATES
AND LICENSORS MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND,
WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE REGARDING THE
SOFTWARE, INCLUDING ANY WARRANTY THAT THE SOFTWARE WILL BE
UNINTERRUPTED, ERROR FREE OR FREE OF HARMFUL COMPONENTS, OR THAT ANY
CONTENT, INCLUDING YOUR CONTENT OR THE THIRD PARTY CONTENT, WILL BE SECURE OR NOT OTHERWISE LOST OR DAMAGED. EXCEPT TO THE EXTENT
PROHIBITED BY LAW, AXON AND OUR AFFILIATES AND LICENSORS DISCLAIM ALL
WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR QUIET ENJOYMENT, AND ANY WARRANTIES ARISING OUT OF ANY COURSE OF DEALING OR USAGE OF TRADE.
7. Limitation of Liability. AXON AND OUR AFFILIATES OR LICENSORS WILL NOT BE
LIABLE TO YOU FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL
OR EXEMPLARY DAMAGES (INCLUDING DAMAGES FOR LOSS OF PROFITS, GOODWILL,
USE, OR DATA), EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. FURTHER, NEITHER AXON NOR ANY OF OUR AFFILIATES OR LICENSORS
WILL BE RESPONSIBLE FOR ANY COMPENSATION, REIMBURSEMENT, OR DAMAGES ARISING IN CONNECTION WITH: (A) YOUR INABILITY TO USE THE SOFTWARE, INCLUDING AS A RESULT OF ANY (i) TERMINATION OR SUSPENSION OF THIS AGREEMENT OR YOUR USE OF OR ACCESS TO THE SOFTWARE, (ii) DISCONTINUATION OF A PORTION OR ALL OF THE SOFTWARE, OR, (iii) WITHOUT LIMITING ANY OTHER
OBLIGATIONS, ANY UNANTICIPATED OR UNSCHEDULED DOWNTIME OF ALL OR A
PORTION OF THE SOFTWARE FOR ANY REASON, INCLUDING AS A RESULT OF POWER OUTAGES, SYSTEM FAILURES OR OTHER INTERRUPTIONS; (B) THE COST OF PROCUREMENT OF SUBSTITUTE SOFTWARE, GOODS OR SERVICES; (C) ANY
INVESTMENTS, EXPENDITURES, OR COMMITMENTS BY YOU IN CONNECTION WITH THIS AGREEMENT OR YOUR USE OF OR ACCESS TO THE SOFTWARE; OR (D) ANY
UNAUTHORIZED ACCESS TO, ALTERATION OF, OR THE DELETION, DESTRUCTION, DAMAGE, LOSS OR FAILURE TO STORE ANY OF YOUR CONTENT OR OTHER DATA. IN ANY CASE, AXON AND OUR AFFILIATES’ AND LICENSORS’ AGGREGATE LIABILITY
UNDER THIS AGREEMENT WILL BE LIMITED TO THE AMOUNT YOU ACTUALLY PAY AXON
UNDER THIS AGREEMENT FOR THE SOFTWARE THAT GAVE RISE TO THE CLAIM DURING THE 12 MONTHS PRECEDING THE CLAIM.
8. Remedies. YOUR EXCLUSIVE REMEDY IS, AT AXON’S SOLE OPTION, REPAIR OR
REPLACEMENT OF THE SOFTWARE OR REFUND OF PART OR THE ENTIRE LICENSE FEE, IF ANY, PAID BY YOU FOR THE SOFTWARE.
A AXON
Title: Axon Desktop Software End User License Agreement Department: Legal
Version: 1.0
Release Date: 11/26/2018
Desktop Software End User License Agreement
9. Offline Mode. Axon is not liable for any improper or incorrect use of the data collected by, distributed by, or downloaded with the Software in Offline Mode. Once you transfer data from the TASER or Axon brand product to your local computer, Axon makes no guarantee or warranty that the data cannot be altered or will remain in its original format. It is your responsibility to monitor data storage, usage and collection. Axon gives no warranty, expressed or implied, as to the accuracy, reliability, or completeness of the data collected by, distributed by, or downloaded with the Software in Offline Mode. Although this data may have been captured successfully by a TASER or Axon brand product, no warranty expressed or implied is made regarding the utility of the data on another system or for general or evidentiary purposes, nor will the act of distribution constitute any such warranty. This disclaimer applies to individual use of the data and aggregate use with other data.
10. Termination. This Agreement will continue for the duration of Axon’s copyright in the Software, unless earlier terminated as provided in this Agreement. Axon may terminate your license immediately without notice to you for your failure to comply with any of the terms set forth in this Agreement. Upon termination, you must immediately destroy the Software, together with all copies, adaptations and merged portions thereof in any form. Obligations to pay accrued charges or fees will survive the termination of this Agreement.
11. Assignment. Neither party may assign or otherwise transfer this Agreement or any of its rights and obligations under this Agreement without the prior written approval of the other party.
Notwithstanding the above, either party may assign or otherwise transfer this Agreement or any of its rights or obligations under this Agreement without the consent of the other party (a) in connection with a merger, acquisition or sale of all or substantially all of its assets, or (b) to as part of a corporate reorganization. Subject to the foregoing, this Agreement will be binding upon, and inure to the benefit of the parties and their respective successors and assigns.
12. No Third Party Beneficiaries. This Agreement does not create any third party beneficiary rights in any individual or entity that is not a party to this Agreement.
13. Export Requirements. You may not export or re-export the Software or any copy or adaptation in violation of any applicable laws or regulations.
14. U.S. Government Rights. If you are a U.S. Federal department or using Axon the Software behalf of U.S. Federal department, Software provided as a “commercial item,” “commercial computer software,” “commercial computer software documentation,” and “technical data”, as defined in the Federal Acquisition Regulation and Defense Federal Acquisition Regulation Supplement. If you are using Software on behalf of the U.S. Government and these terms fail to meet the U.S. Government’s needs or are inconsistent in any respect with federal law, you will immediately discontinue use of the Software.
15. Entire Agreement. Unless otherwise expressly agreed in writing, this Agreement constitutes the sole and exclusive agreement between you and Axon with regard to the Software, and supersedes all prior agreements, whether oral or written, and other communications between the parties relating to the subject matter set forth in this Agreement. You agree that your purchase or use of the Software is neither contingent on the delivery of any future functionality or features nor dependent on any oral or written public comments made by Axon regarding future functionality or features of the Software. No modification or amendment of any portion of this Agreement will be effective unless in writing and signed by the parties to this Agreement. If Axon provides a translation of the English language version of this Agreement, the English language version of the Agreement will control if there is any conflict.
A AXON
Title: Axon Desktop Software End User License Agreement Department: Legal
Version: 1.0
Release Date: 11/26/2018
Desktop Software End User License Agreement
16. No Waivers. The failure by either party to enforce any provision of this Agreement will not constitute a present or future waiver of the provision nor limit the party’s right to enforce the provision later. All waivers by a party must be in writing.
17. Severability. If a court of competent jurisdiction holds any portion of this Agreement invalid or unenforceable, the remaining portions of this Agreement will remain in effect.
18. Governing Law; Venue. The laws of the State of Arizona, without reference to conflict of law rules, govern this Agreement and any dispute of any sort that might arise between the parties.
Any dispute relating in any way to the Software or this Agreement must only be adjudicated in a state or federal court located in Maricopa County, Arizona. Each party consents to exclusive jurisdiction and venue in these courts. Notwithstanding the foregoing, either party may seek injunctive relief in any state, federal, or national court of competent jurisdiction for any actual or alleged infringement of that party’s or any third party’s intellectual property or other proprietary rights. The United Nations Convention for the International Sale of Goods does not apply to this Agreement.
c, Axon, and TASER are trademarks of Axon Enterprise, Inc. some of which are registered in the US and other countries. For more information, visit www.axon.com/legal. All rights reserved. © 2018 Axon Enterprise, Inc.
A AXON
Title: Axon Desktop Software End User License Agreement Department: Legal
Version: 1.0
Release Date: 11/26/2018
CITY OF CRESCENT CITY RESOLUTION NO. 2022-20 Page 1
RESOLUTION NO. 2022-20
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CRESCENT CITY AMENDING THE FISCAL YEAR 2021-22 BUDGET OF THE CITY OF CRESCENT CITY WHEREAS, the budget for the fiscal year beginning July 1, 2021, as submitted by the City Manager, was reviewed by the City Council and a public hearing was held thereon the 21 st day of June 2021; and
WHEREAS, the City Council adopted said budget and has the authority to amend said budget from time to time; and
WHEREAS, the City Council of the City of Crescent City has approved an agreement with the Del Norte County Board of Supervisors whereby the County will reimburse the City for the purchase of 13 Axon software user licenses for use by the Del Norte County District Attorney’s Office; and WHEREAS, the District Attorney’s use of these software licenses will create greater efficiency in the sharing of information between the Police Department and the District Attorney’s Office regarding video evidence related to criminal cases; and
WHEREAS, fulfillment of these priorities requires an amendment to the budget.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CRESCENT CITY AS FOLLOWS:
1. That the Fiscal Year 2021-22 City of Crescent City Annual Budget is hereby amended and appropriated in the amounts identified below:
Revenue Increase (Decrease) Expenditure Increase (Decrease) General Fund $2,340 $2,340
APPROVED and ADOPTED and made effective the same day at a regular meeting of the City Council of the City of Crescent City held on the 21st day of March 2022 by the following polled vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
_______________________________
Jason Greenough, Mayor
ATTEST:
_____________________________
Robin Patch, City Clerk
CITY COUNCIL AGENDA REPORT
TO: MAYOR GREENOUGH AND MEMBERS OF THE CITY COUNCIL
FROM: ERIC WIER, CITY MANAGER
BY: MARTHA D. RICE, CITY ATTORNEY
DATE: MARCH 21, 2022
SUBJECT: GAS TAXES AND GAS PRICES
______________________________________________________________________
RECOMMENDATION
• Hear staff report
• Technical questions from the Council
• Receive public comment
• Further Council discussion
• Take such action and/or direct staff as necessary and appropriate, possibly including writing letters to state and federal lawmakers requesting relief for taxpayers in light of soaring gas prices
BACKGROUND
GAS PRICES
Gas prices are largely dependent upon crude oil prices, which are determined in the global crude oil market by the worldwide demand for and supply of crude oil. Other components of the retail price of gas are refining costs and profits, distribution and marketing costs and profits, and taxes.
GAS TAXES
FEDERAL STATE LOCAL
Excise tax $0.184 per gal Excise tax $0.511 per gal No excise tax No sales tax Sales tax 2.25% Sales tax 1.0%
UST fee $0.001 per gal UST fee $0.02 per gal No UST fee NOTES:
• State excise taxes adjust annually according to a predetermined formula; the tax is scheduled to increase $0.03 in July to $0.541; the federal excise tax has not increased since 1997 • State sales tax was reduced to 2.25% and the excise tax raised as part of the “Gas Tax Swap” in 2010 to create greater budget flexibility
• The underground storage tank (UST) fee provides revenue for the UST Cleanup Fund, which provides financial assistance to owners/operators of USTs to remediate conditions caused by UST leaks, etc.
GAS TAXES AND GAS PRICES
MARCH 21, 2022
2 Breakdown of Gas Taxes
Assuming price of gas is $6.00 per gallon:
Total Federal Tax Total State Tax Total Local Tax
$0.184 per gallon $0.666 per gallon $0.06 per gallon
$3.68 for 20 gallons $13.32 for 20 gallons $1.20 for 20 gallons Total tax paid on $6 per gallon gas is $0.91 per gallon (15% of the total cost), meaning that $5.09 (85%) is made up of the various components of the retail price, such as per gallon crude oil prices, costs of refining, distribution, marketing and profits for each sector (wholesale, retail, refinement).
Information on breakdown of retail components obtained from U.S. Energy Information Administration: eia.gov/petroleum/gasdiesel/
CRUDE OIL PRICES
The largest and most variable component of gas prices is the price of crude oil. Crude oil is traded on the global market and, therefore, subject to a variety of international pressures and influences. The pandemic resulted in decreased domestic production, which has yet to catch up to pre-pandemic levels. The sanctions imposed on Russia (including the refusal to buy Russian crude oil) have created a higher global demand for crude oil as Russia is the second largest oil producer in the world (second only to the United States). Basic economics tells us that when supply decreases, prices increase.
Uncertainty of supply caused by geopolitical events can also cause prices to increase as crude oil purchasers are anticipating a decrease in supply.
Another large influence on global crude oil prices is the Organization of the Petroleum Exporting Countries (OPEC), which consists of Algeria, Angola, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia, the 55%
14%
16%
11%
3%
1%
Breakdown of Gas Prices based on $6 per gallon
Crude Oil Refining Distr. & Marketing
State Tax Federal Tax Local Tax
GAS TAXES AND GAS PRICES
MARCH 21, 2022
3 United Arab Emirates and Venezuela. OPEC members control about 71% of the world’s total proved crude oil reserves and account for about 35% of total world crude oil production (2020 numbers). OPEC sets production targets for its members, which affects oil prices by impacting the total global supply of oil. OPEC also maintains the world’s entire spare crude oil production capacity (“spare capacity” is defined as that oil production that can be brought online within 30 days and be sustained for at least 90 days.)
The United States maintains a Strategic Petroleum Reserve (SPR) along the coastline of the Gulf of Mexico. The SPR is to be used to infuse the global market with additional millions of gallons of crude oil to lessen the impact of disruptions to the market. The idea being that creating more supply to meet demand will lessen the price. In November, President Biden ordered the release of 50 million barrels of crude oil form the SPR and on March 1st, he committed to releasing another 30 million barrels.
ITEM ANALYSIS
CURRENT EFFORTS TO PROVIDE RELIEF AT THE PUMP
1. Gov. Newsom: (1) Governor’s proposed budget includes a “pause” on the scheduled adjustment to gas excise tax in July 2022 (scheduled to rise by $.03 per gallon from $0.511 to $0.541) and (2) tax rebates in the form of direct payments to taxpayers (no specific details given as to amount, timing, eligibility).
2. CA Legislature: Assembly Member Kevin Kiley introduced AB 1638 (Motor Vehicle Fuel Tax Law: suspension of tax) on 1/12/2022 to suspend the state excise tax for 6 months from the date of passage. The bill would also backfill this loss of revenue with money from the General Fund. This bill is still working its way through committees.
3. US Congress: Bills introduced by both the house and the senate to suspend federal excise tax through 2022 ($0.184 per gallon).
a. S. 3609 (Gas Prices Relief Act of 2022) was introduced by Sen. Mark Kelly and 6 co-sponsors on 2/9/2022. It has been referred to the Committee on Finance. This bill provides for a temporary exemption through the end of 2022 from the excise tax on gasoline (other than aviation gasoline) and from the Leaking Underground Storage Tank Trust Fund financing rate. The Department of the Treasury must transfer from the general fund to the Highway Trust Fund and the Leaking Underground Storage Tank Trust Fund amounts resulting from the exemption provided by this bill. The bill also expresses congressional policy that consumers immediately receive the benefit of this exemption.
b. H.R. 6787 (Gas Prices Relief Act of 2022) was introduced by Rep. Tom O’Halleran and 12 co-sponsors on 2/18/2022. It has been referred to the House Ways and Means Committee. This bill is identical to S. 3609.
4. President Biden: as stated above, President Biden ordered the release of 50 million gallons of crude oil from the SPR to the global market.
GAS TAXES AND GAS PRICES
MARCH 21, 2022
4 It is important to note that excise taxes are imposed on gas suppliers and passed along to consumers as part of the retail price of gas. If either the state or federal excise taxes are suspended, it is unknown how much of that savings will be passed along to consumers. For example, the price of crude oil dropped nearly $30 per barrel in one week, yet the prices at the pump do not reflect a similar decrease.
Potential Options for Direction/Action:
• Write letters of support for pending state and/or federal legislation • Write letters to state and federal representatives imploring them to take action to provide relief to consumers
• Letters to state and/or federal representatives requesting specific action
ATTACHMENTS
1. Understanding Gasoline Prices by American Petroleum Institute; American Petroleum Institute “about” page
2. Gas Tax Swap article by the California Transit Association
3. Flow Chart of State Excise Tax Revenue Distribution
4. EIA article: Oil and petroleum products explained
5. HR 6787; S 3609 (Gas Prices Relief Act of 2022)
6. CAL Matters Article: Gas prices in California: How lawmakers plan to help
7. AB 1638 (Motor Vehicle Fuel Tax Law: suspension of tax) PRICES AT THE PUMP historically
follow the global cost of crude
oil, which is influenced by current
conditions and expectations
of consumer demand, supply,
inventories, geopolitical events, the
strength of the U.S. dollar and other
factors. Prices across the states can
also vary based on the different
state taxes applied to each gallon.
UNDERSTANDING
GASOLINE PRICES POWER
PAST
® IMPOSSIBLE.ORG
Pump prices track with crude
oil costs.
Because the price of crude oil
is the single largest cost factor in
manufacturing gasoline, changes
in the global price of crude oil
generally have a direct effect on
pump prices. As the chart shows,
gasoline and global crude prices
typically move together. Current
pump prices have remained
relatively low and in the same
range as they were four years ago.
Gasoline and Crude Oil Prices Move Together
Gasoline taxes vary from state
to state.
Gasoline taxes in West Coast
states range from 55 cents per
gallon in Oregon to 73 cents per
gallon in California. Pennsylvania
currently has the highest state
gasoline tax at 77 cents per
gallon. Alternatively, some of the
lowest gasoline tax rates are in the
southern states, averaging less than
40 cents per gallon.
8%
18%
21%
53% CRUDE OIL
EXCISE TAXES
TRANSPORTATION AND RETAIL
REFINING COSTS
Oil Prices are the #1 Factor in Motor Fuel Production
© Copyright 2019, all rights reserved. Digital Media | DM2019 | Vendor File Gasoline Taxes
(cents per gallon)
Greater than 49.5
40.0 – 49.5
Less than 40.0
U.S. AVERAGE: 52.18
49.59 42.23
48.41 62.50
77.10 54.10
54.85 39.15
53.68 60.39
39.49 44.80
44.40 37.19
40.20 35.75
49.10 47.00
41.40 48.40 42.40
50.65 51.40
55.17 67.80
72.76 52.18
48.41 40.40
48.90 42.43
38.40 38.40
37.28 37.40
32.84 38.41
50.38 51.30
56.81 61.30 46.41
39.06 64.78
44.94 52.40
55.25 59.80
41.40 53.70
41.90 (DC)
Disclaimer: This report is posted for informational purposes only and should not be relied upon or used for compliance purposes.
GASOLINE TAXES COMBINED LOCAL, STATE AND FEDERAL (CENTS PER GALLON) RATES EFFECTIVE 01/01/2019
m
*
Seasonal Variation: Refiners and blenders
follow different requirements for summer
blend gasoline, which has a lower
evaporation rate than winter blend gasoline,
decreasing emissions as temperatures rise.
According to the EPA, summer gasoline has
1.7 percent more energy than winter blend
gasoline, but is more expensive to produce.
Other factors influencing pump prices:
The U.S. is the world’s top producer of natural gas and oil. This position has helped keep energy more affordable for families and businesses, and shielded U.S. consumers from the more frequent and dramatic price fluctuations that were once routine. In February, 2019, U.S. consumers enjoyed domestic oil prices that continued to run at a discount of more than $9 per barrel below international crude oil prices.
Sources: https://www.eia.gov/energyexplained/index.php?page=oil_where; https://www.bloomberg.com/news/articles/2018-05-01/opec-s-reason-for-sticking-with-the-cuts-rests-on-shaky-ground; Board of Governors of the Federal Reserve System (US); https://www.eia.gov/petroleum/gasdiesel/]; https://www.eia.gov/energyexplained/index.php?page=gasoline_factors_affecting_prices Strength of the Dollar: Oil is traded globally
and priced using the U.S. dollar. According
to the Federal Reserve, the U.S. dollar
appreciated by 6.3 percent in February
2019 compared with February 2018. As a
result, countries around the world effectively
paid higher prices for oil and refined
products, when sold in local currencies.
Basic economics tells us higher prices
generally lower demand, which, in turn, can
cause prices to increase until an equilibrium
is reached between supply and demand.
Geopolitics: World events can affect global
crude oil markets. Production disruptions,
transportation and other supply restrictions
can affect the supply/demand balance.
In general, instability - or even the threat
of instability - can factor into global crude
market trends.
1.7%
Value of U.S. Dollar
r:«
3/7/22, 11:15 AM Gas Tax Swap - California Transit Association Explore Transit History
Gas Tax Swap
In 2010, the Legislature enacted a “tax swap” intended to create more budget flexibility. Before the tax swap, fuels were subject to a state excise tax of 18 cents a gallon as well as state sales tax of 6%. Under the swap, the excise tax on gasoline was raised initially to 35.3 cents a gallon and the sales tax was eliminated.
The additional 17.3 cents a gallon excise tax was needed to produce the amount of revenues as had the sales tax. The additional excise tax was to be adjusted annually to maintain tax “neutrality” with the sales tax on gasoline discontinued. The excise tax on diesel fuel was to be 13.6 cents a gallon and the sales tax on diesel was to be 6.75%.
The tax swap legislation was intended to provide immediate budget relief to the state through a loan from fuel excise tax revenues to the General Fund, as well to make future budgeting easier by increasing use of flexible funding sources. Increased flexibility resulted from the fact that in California, gas taxes cannot be used to pay debt service on general state transportation bonds, whereas the State Constitution did allow the use of fuel excise tax revenues to pay transportation debt service.
The swap also provided funding from the new excise tax to “backfill” gasoline sales tax revenues that would have been provided under the old funding system to local agencies for their streets and roads programs. Funding for the State Transportation Improvement Program, which previously came from the sales tax, was also maintained at approximately the same levels that had previously been provided.
However, the Public Transportation Account (PTA), which had received a large share of the gasoline sales tax revenues prior to the swap, was hurt by the 2010 swap. Partial compensation for the loss of gasoline sales tax was made up by increasing the sales tax on diesel fuel and depositing this tax into the PTA. In addition, the Legislature increased the share of the revenues going to the account.
Two propositions approved by voters in the Nov. 2010 elections threw a wrench in the works. Proposition 22 restricted the state’s ability to pay for transportation debt service using fuel excise tax revenues, prohibited borrowing of fuel excise tax revenues as well as certain other transportation funds, and required that future gasoline sales tax revenues (if any) be used only for transportation purposes. Prop. 26 Proposition 26, required a 2/3 vote of both houses of the Legislature for any change in statute that results in any taxpayer paying a higher tax and provides that any tax adopted after January 1, 2010, but prior to November 3, 2010, that was not adopted in compliance with the 2/3 vote requirement shall be void, unless reenacted by the Legislature with a 2/3 vote.
AB 105 (2011) responded to both of these propositions. It eliminated the sales tax on gasoline and replaced it with the price-base excise tax to be adjusted annually, and also authorized the redirection of vehicle weight fees from the state highway account to the General Fund to pay off obligation bond debt service for specified voter-approved transportation bonds, thus avoiding conflict with Prop 22.
View highlights and histories of Association member organizations. https://caltransit.org/about/50-years/explore-transit-history/gas-tax-swap/#:~:text=Under the swap%2C the excise,as had the sales tax. 1/3
C a l i f o r n i a C i t y F i n a n c e . c o m
Rates effective July 1, 2022
Effective Date Base Rate Sec2103 SB1 Rate Total
July 1, 2010 $ 0.180 $ 0.173 $ 0.353
July 1, 2011 $ 0.180 $ 0.177 $ 0.357
July 1, 2012 $ 0.180 $ 0.180 $ 0.360
July 1, 2013 $ 0.180 $ 0.215 $ 0.395
July 1, 2014 $ 0.180 $ 0.180 $ 0.360
July 1, 2015 $ 0.180 $ 0.120 $ 0.300
July 1, 2016 $ 0.180 $ 0.098 $ 0.278
July 1, 2017 $ 0.180 $ 0.117 $ 0.297
Nov 1, 2017* $ 0.180 $ 0.117 $ 0.120 $ 0.417
July 1, 2019 $ 0.180 $ 0.173 $ 0.120 $ 0.473
July 1, 2020 $ 0.192 $ 0.185 $ 0.128 $ 0.505
July 1, 2021 $ 0.194 $ 0.187 $ 0.130 $ 0.511
July 1, 2022 est $ 0.206 $ 0.198 $ 0.137 $ 0.541
California Gasoline Excise Tax Rates - Per Gallon
Effective Date Base Rate SB1 Rate Total
July 1, 2017 $ 0.160 $ 0.160
Nov 1, 2017* $ 0.160 $ 0.200 $ 0.360
July 1, 2019 $ 0.160 $ 0.200 $ 0.360
July 1, 2020 $ 0.171 $ 0.214 $ 0.385
July 1, 2021 $ 0.173 $ 0.216 $ 0.389
July 1, 2022 est $ 0.183 $ 0.228 $ 0.411
California Diesel Excise Tax Rates
Wt Fees ~$1.7 billion
Str&Hw ys §2103(a)(1)
22%
Str&Hw ys §2103(a)(3)(C)
22%
Str&Hw ys §2103(a)(3)(C)
56%
Str&Hw ys §2103(a)(3)(A-B)
51.2% Str&Hw ys §2108
22.6% (i )
Str&Hw ys §2104
14.6% (i)
Str&Hw ys §2107
Counties(iv)
Cities (v)
State
Highway
Account
Allocation of Gasoline Excise Tax Revenues
54.1¢
10.3¢ Per Gal
§2105
10.3¢
§2104, §2106,
§2107,§2108
77% (iii)Str&Hw ys §2105
11.5%Str&Hw ys §2105b
11.5%Str&Hw ys §2105a
11.5% (i),(ii ) Str&Hw ys §2106 Cities and
Counties
19.8¢
§2103
Transportation
Debt Service
(State General Remainder to...
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3/16/22, 10:37 AM Oil prices and outlook - U.S. Energy Information Administration (EIA) U.S. Energy Information
ClCl Administration
OIL AND PETROLEUM PRODUCTS EXPLAINED
OIL PRICES AND OUTLOOK
BASICS
Crude oil prices are determined by global supply and demand. Economic growth is one of the biggest factors affecting petroleum product—and therefore crude oil—demand. Growing economies increase demand for energy in general and especially for transporting goods and materials from producers to consumers. The world’s transportation sector is almost totally dependent on petroleum products such as gasoline and diesel fuel. Many countries also rely heavily on petroleum fuels for heating, cooking, or generating electricity. Petroleum products made from crude oil and other hydrocarbon liquids account for about a third of total world energy consumption.
OPEC can influence world oil supplies and prices
The Organization of the Petroleum Exporting Countries (OPEC) can have a significant influence on oil prices by setting production targets for its members. OPEC includes countries with some of the world's largest oil reserves. At the beginning of 2020, OPEC members controlled about 71% of total world proved crude oil reserves (plus lease condensate), and they accounted for 36% of total world crude oil production in 2020.
OPEC attempts to manage oil production of its member countries by setting crude oil production targets, or quotas, for its members. Compliance of OPEC members with OPEC quotas is mixed because production decisions are ultimately in the hands of the individual members.
World oil market
CL. Spare capacity and call on OPEC
9 0
Theoretical maximum world oil production capacity
OPEC spare
capacity w
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2 Notes: Call on OPEC includes stock changes.
This theoretical example assumes constant production capacity. Actual production capacity changes over time.
Time
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https://www.eia.gov/energyexplained/oil-and-petroleum-products/prices-and-outlook.php 1/4 3/16/22, 10:37 AM Oil prices and outlook - U.S. Energy Information Administration (EIA) Source: U.S. Energy Information Administration
Average monthly U.S. refiner
acquisition cost of crude oil,
1975-2021
dollars per barrel
130
120
110
100
90 80
70 60
50 40
30 20
10 0
I l
Or5
Source: U.S. Energy Information Administration, Petroleum Marketing Monthly, February 2022
Note: Composite acquisition cost of crude oil for U.S.
eicD refiners.
In general, the main factors determining OPEC's effectiveness in influencing oil prices include:
• The extent to which OPEC members actually comply with production quotas • The ability or willingness of consumers to reduce petroleum consumption • The competitiveness of non-OPEC producers when oil prices change • The efficiency of OPEC producers to supply oil compared with non-OPEC producers The difference between oil market demand and supply from non-OPEC sources is often referred to as the call on OPEC because OPEC members maintain the world's entire spare crude oil production capacity. Saudi Arabia, the largest OPEC oil producer and one of the world's largest oil exporters, historically has had the largest share of the world's spare oil production capacity.
Developing and maintaining idle spare production capacity is generally not cost-effective for international oil companies (IOC) because the IOC business model maximizes revenue by producing oil as long as the price of selling the oil is higher than the cost of supplying an additional barrel of oil to market. OPEC spare capacity provides an indicator of the world oil market's ability to respond to real and potential disruptions in world oil supplies.
The U.S. Energy Information Administration (EIA) defines spare capacity as the volume of oil production that can be brought online within 30 days and sustained for at least 90 days.
Spare capacity can also be thought of as the difference between a country's current oil production and its maximum oil production capacity. If a supply disruption occurs, oil producers can use spare capacity to moderate increases in world oil prices by boosting production to offset reduced oil supplies.
did you
know
Causes of world crude oil prices and supply disruptions https://www.eia.gov/energyexplained/oil-and-petroleum-products/prices-and-outlook.php 2/4 3/16/22, 10:37 AM Oil prices and outlook - U.S. Energy Information Administration (EIA) Geopolitical events and severe weather that disrupt the supply of crude oil and petroleum products to market can affect crude oil and petroleum product prices. These events may create uncertainty about future supply or demand, which can lead to higher volatility in prices. The volatility of oil prices is tied to the low responsiveness, or inelasticity, of supply and demand to price changes in the short term. Crude oil production capacity and the equipment that uses petroleum products as its main source of energy are relatively fixed in the near term. It takes time to develop new supply sources or to vary production, and when prices rise, switching to other fuels or increasing equipment fuel efficiency in the near term is challenging for consumers to do. These conditions may require a large price change to rebalance physical supply and demand.
Most of the crude oil reserves in the world are located in regions that have been prone to political upheaval or in regions that have had oil production disruptions because of political events. Several major oil price shocks have occurred at the same time that political events caused supply disruptions, most notably the Arab Oil Embargo in 1973-74, the Iranian revolution, the Iran-lraq war in the 1980s, and the Persian Gulf War in 1990-91. In recent years, conflicts and political events in the Middle East, the Persian Gulf, Libya, and Venezuela have contributed to world oil supply disruptions and increases in oil prices.
Given the history of oil supply disruptions caused by political events, market participants constantly assess the possibility of future disruptions. In addition to the size and duration of a potential disruption, market participants also consider the availability of crude oil stocks and the ability of other producers to offset a potential supply loss. When spare capacity and inventories are low, a potential supply disruption may have a greater impact on prices than might be expected if only current demand and supply were considered.
Weather also plays a significant role in the supply of crude oil. Hurricanes in the Gulf of Mexico can affect oil production and refinery operations in the Gulf region. As a result, U.S. petroleum product prices may increase sharply as supplies from the Gulf to other regions drop. Severe cold weather can also strain product markets as producers attempt to supply enough product, such as heating oil, to consumers in a short amount of time. This seasonal demand can also result in higher prices.
Other events such as refinery outages or pipeline problems can also restrict the flow of crude oil and petroleum products to market.
These events can lead to a temporary supply disruption that could increase prices.
The influence of any of these factors on crude oil prices tends to be relatively short lived. Once the supply disruption subsides, oil and product supply chains adjust, and prices usually return to their previous levels.
Buyers and sellers at a global auction
Crude oil and petroleum product prices are the result of thousands of transactions taking place simultaneously around the world at all levels of the supply chain, from the crude oil producer to the individual consumer. Oil markets are essentially a global auction— the highest bidder will win the available supply.
Like any auction, the bidder doesn't want to pay too much. When markets are tight (when demand is high and/or available supply is low), the bidder must be willing to pay a higher premium. When markets are loose (demand is low and/or available supply is high), a bidder may choose not to outbid competitors, waiting instead for lower-priced supplies.
Different types of oil market transactions are available Contract arrangements in the oil market cover most crude oil that changes hands. Crude oil is traded in the futures markets. A futures contract is a standard contract to buy or sell a specific commodity of standardized quality at a certain date in the future. If oil producers want to sell oil in the future, they can lock in their desired price by selling a futures contract today. Alternatively, if consumers need to buy crude oil in the future, they can guarantee the price they will pay at a future date by buying a futures contract. In addition to oil producers and consumers, futures contracts are also bought and sold by market participants or speculators who do not produce or consume crude oil. These types of traders buy and sell futures contracts in anticipation of price changes, hoping to make a profit from those changes.
https://www.eia.gov/energyexplained/oil-and-petroleum-products/prices-and-outlook.php 3/4 3/16/22, 10:37 AM Oil prices and outlook - U.S. Energy Information Administration (EIA) Crude oil is also sold in spot transactions—on the spot purchases of a single shipment for prompt delivery at the current market price.
Changes in prices send signals to the market
Prices in spot markets send a clear signal about the balance of supply and demand. Rising prices indicate that additional supply is needed, and falling prices indicate there is too much supply for current demand. Futures markets also provide information about the physical supply and demand balance as well as the market's expectations.
The outlook for crude oil prices is uncertain
The large changes in world oil prices in the past decade demonstrate how all of these factors can influence oil prices, and they demonstrate the difficulty in making projections for oil prices. The U.S. Energy Information Administration projects crude oil prices in the
• Short-Term Energy Outlook. See Table 2. Energy Prices • Annual Energy Outlook. See Table 12 Petroleum and Other Liquids Prices in the Reference case and in side cases Last updated: February 25, 2022
https://www.eia.gov/energyexplained/oil-and-petroleum-products/prices-and-outlook.php 4/4 I
117TH CONGRESS
2D SESSION H. R. 6787
To amend the Internal Revenue Code of 1986 to provide a gasoline tax holiday.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 18, 2022
Mr. O’HALLERAN (for himself, Ms. DAVIDS of Kansas, Ms. SCHRIER, Mr.
HARDER of California, Mr. KILDEE, Mr. CORREA, Ms. SLOTKIN, Mrs.
CHERFILUS-MCCORMICK, and Mr. MORELLE) introduced the following bill; which was referred to the Committee on Ways and Means A BILL
To amend the Internal Revenue Code of 1986 to provide
a gasoline tax holiday.
1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ‘‘Gas Prices Relief Act
5 of 2022’’.
6 SEC. 2. FINDINGS.
7 Congress finds the following:
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2 •HR 6787 IH
1 (1) As of February 2022, the Consumer Price
2 Index rose 7.5 percent from one year ago, the larg3 est increase in 40 years. 4 (2) Compared with 2021, the energy index rose
5 27 percent and food costs rose 7 percent, placing an
6 unprecedented burden on American families.
7 (3) Shipping costs have increased year-over8 year, raising the price of important groceries like 9 milk, eggs, bread, meat, and other goods.
10 (4) According to data from the Federal High11 way Administration, the average American driver 12 drives 14,263 miles per year. A suspension of the
13 Federal gas tax would save the average American
14 more than $100 per year.
15 (5) The Infrastructure Investment and Jobs
16 Act provided $118 billion in funding from the gen17 eral fund to supplement the Highway Trust Fund. 18 (6) The 18.4 cent Federal gas tax dispropor19 tionately impacts rural Americans, who must travel 20 longer distances to go to the grocery store, see their 21 doctors, go to the pharmacy to pick up their pre22 scriptions, or travel to their jobs or school. 23 (7) On August 30, 2021, the Federal Trade
24 Commission announced enhanced efforts to step up
25 enforcement on oil and gas companies for alleged
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3 •HR 6787 IH
1 collusion that led to increased gas prices for Amer2 ican consumers. 3 (8) Since 2008, Congress has transferred funds
4 from the general fund to the Highway Trust Fund
5 three times to ensure the fund remained solvent.
6 (9) Oil companies reported record profits in
7 2021 while Americans continue to struggle under
8 high gas prices, inflation, and ongoing impacts of a
9 pandemic.
10 (10) The Organization of Petroleum Exporting
11 Countries (OPEC) takes actions to control oil pro12 duction by considerably influencing international oil 13 prices at the expense of American consumers.
14 (11) A temporary gas tax holiday is one way to
15 lower prices for American consumers as we continue
16 to work towards long-term energy independence.
17 SEC. 3. 2022 GASOLINE TAX HOLIDAY.
18 (a) IN GENERAL.—In the case of gasoline removed,
19 entered, or sold on or after the date of the enactment of 20 this Act and before January 1, 2023—
21 (1) the rate of tax under section
22 4081(a)(2)(A)(i) of the Internal Revenue Code of
23 1986 shall be zero; and
24 (2) the Leaking Underground Storage Tank
25 Trust Fund financing rate under section 4081(a)(2)
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4 •HR 6787 IH
1 of such Code shall not apply to gasoline to which the 2 rate under paragraph (1) applies.
3 (b) TRANSFERS TO TRUST FUND.—
4 (1) IN GENERAL.—The Secretary of the Treas5 ury shall transfer from the general fund to the 6 Highway Trust Fund established under section
7 9503(a) of the Internal Revenue Code of 1986 and
8 the Leaking Underground Storage Tank Trust Fund
9 established under section 9508(a) of such Code
10 amounts equal to the reduction in amounts credited
11 (but for this subsection) to each such Trust Fund by 12 reason of subsection (a).
13 (2) COORDINATION RULES.—
14 (A) LEAKING UNDERGROUND STORAGE
15 TANK TRUST FUND.—Amounts transferred to
16 the Leaking Underground Storage Tank Trust
17 Fund under paragraph (1) shall be treated for
18 purposes of sections 9503(b)(1) and 9508(b)(2)
19 of such Code as taxes received in the Treasury
20 under section 4081 of such Code attributable to
21 the Leaking Underground Storage Tank Trust
22 Fund financing rate.
23 (B) HIGHWAY TRUST FUND.—Amounts
24 transferred to the Highway Trust Fund under
25 paragraph (1) shall be treated for purposes of
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5 •HR 6787 IH
1 section 9503(b)(1) of such Code as taxes re2 ceived in the Treasury under section 4081 of 3 such Code which are not attributable to the
4 Leaking Underground Storage Tank Trust
5 Fund financing rate.
6 (c) BENEFITS OF TAX REDUCTION SHOULD BE
7 PASSED ON TO CONSUMERS.—
8 (1) It is the policy of Congress that—
9 (A) consumers immediately receive the
10 benefit of the reduction in taxes resulting from
11 the application of subsection (a); and
12 (B) transportation motor fuels producers
13 and other dealers take such actions as nec14 essary to reduce transportation motor fuels 15 prices to reflect such reduction.
16 (2) ENFORCEMENT.—The Secretary may use
17 all applicable authorities to ensure that the benefit 18 of the reduction in taxes resulting from the applica19 tion of subsection (a) is received by consumers.
Æ
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II
117TH CONGRESS
2D SESSION S. 3609
To amend the Internal Revenue Code of 1986 to provide a gasoline tax holiday.
IN THE SENATE OF THE UNITED STATES
FEBRUARY 9, 2022
Mr. KELLY (for himself, Ms. HASSAN, Ms. STABENOW, Ms. CORTEZ MASTO, Mr. WARNOCK, and Ms. ROSEN) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to provide
a gasoline tax holiday.
1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the ‘‘Gas Prices Relief Act
5 of 2022’’.
6 SEC. 2. 2022 GASOLINE TAX HOLIDAY.
7 (a) IN GENERAL.—In the case of gasoline removed,
8 entered, or sold on or after the date of the enactment of 9 this Act and before January 1, 2023—
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2 •S 3609 IS
1 (1) the rate of tax under section
2 4081(a)(2)(A)(i) of the Internal Revenue Code of
3 1986 shall be zero, and
4 (2) the Leaking Underground Storage Tank
5 Trust Fund financing rate under section 4081(a)(2)
6 of such Code shall not apply to gasoline to which the 7 rate under paragraph (1) applies.
8 (b) TRANSFERS TO TRUST FUND.—
9 (1) IN GENERAL.—The Secretary of the Treas10 ury shall transfer from the general fund to the 11 Highway Trust Fund established under section
12 9503(a) of the Internal Revenue Code of 1986 and
13 the Leaking Underground Storage Tank Trust Fund
14 established under section 9508(a) of such Code
15 amounts equal to the reduction in amounts credited
16 (but for this subsection) to each such Trust Fund by 17 reason of subsection (a).
18 (2) COORDINATION RULES.—
19 (A) LEAKING UNDERGROUND STORAGE
20 TANK TRUST FUND.—Amounts transferred to
21 the Leaking Underground Storage Tank Trust
22 Fund under paragraph (1) shall be treated for
23 purposes of sections 9503(b)(1) and 9508(b)(2)
24 of such Code as taxes received in the Treasury
25 under section 4081 of such Code attributable to
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3 •S 3609 IS
1 the Leaking Underground Storage Tank Trust
2 Fund financing rate.
3 (B) HIGHWAY TRUST FUND.—Amounts
4 transferred to the Highway Trust Fund under
5 paragraph (1) shall be treated for purposes of
6 section 9503(b)(1) of such Code as taxes re7 ceived in the Treasury under section 4081 of 8 such Code which are not attributable to the
9 Leaking Underground Storage Tank Trust
10 Fund financing rate.
11 (c) BENEFITS OF TAX REDUCTION SHOULD BE
12 PASSED ON TO CONSUMERS.—
13 (1) It is the policy of Congress that—
14 (A) consumers immediately receive the
15 benefit of the reduction in taxes resulting from
16 the application of subsection (a), and
17 (B) transportation motor fuels producers
18 and other dealers take such actions as nec19 essary to reduce transportation motor fuels 20 prices to reflect such reduction.
21 (2) ENFORCEMENT.—The Secretary may use
22 all applicable authorities to ensure that the benefit 23 of the reduction in taxes resulting from the applica24 tion of subsection (a) is received by consumers.
Æ
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3/15/22, 4:46 PM Gas prices in California: How lawmakers plan to help - CalMatters
ECONOMY
Here's how state lawmakers want to
help Californians facing high gas prices
BY GRACE GEDYE
MARCH 11, 2022
A Valero gas station in Sacramento on March 10, 2022. Photo by Miguel Gutierrez Jr., CalMatters CAL ^
MATTERS
IN SUMMARY
Gov. Gavin Newsom proposed pausing tax increase on gas sellers and Republican state lawmakers have pushed for suspending the tax entirely in the short term. Those plans would likely reduce the price of gas, but it's not clear by how much. This week Newsom teased a possible rebate to deal with gas prices.
https://calmatters.org/economy/2022/03/gas-prices-california/ 1/8 3/15/22, 4:46 PM Gas prices in California: How lawmakers plan to help - CalMatters Lea este articulo en espahol.
There's a collective groan, rippling across California, as drivers pull into gas stations and see prices above $5.
Gas prices per gallon are getting higher across the U.S., but prices in California are soaring higher than any other state according to the American Automobile Association. Yesterday, the average price of gas in California was $5.69 - up from $4.68 a month ago - while the national average was $4.32.
Much of what has driven up gas prices over the past several months is outside of California lawmakers' control: Russia's invasion of Ukraine, and the sanctions that followed, have spiked prices, combined with the fact that demand for oil has ramped UP from pandemic lows faster than supply.
California's gas prices tend to be higher than other states in part because of higher taxes for infrastructure and environmental fees. State lawmakers raised the gas tax by 12 cents after a fraught battle in 2017 to pay for roads bridges, transit projects, and more. Then there's some amount of higher gas prices in California that's harder to account for, which Severin Borentein, an energy economist at UC Berkeley, has dubbed the Mvsterv Gasoline Surcharge.
But people are feeling the effects of climbing prices now, and both Democrat and Republican state lawmakers say they want to help. One option is decreasing the state tax on gas suppliers, with the aim of reducing prices.
Another, which Gov. Gavin Newsom teased in his State of the State address, is some form of rebate to help defray the higher cost of gas.
Here's how each of those proposals would work, and what they would mean for Californians.
https://calmatters.org/economy/2022/03/gas-prices-california/ 2/8 3/15/22, 4:46 PM Gas prices in California: How lawmakers plan to help - CalMatters Decrease the tax on gas suppliers - but by how much?
California taxes gas before it gets sold and uses the money to fund highway improvements and transit projects. Right now that tax - paid by suppliers - is about 51 cents per gallon, which makes it the second highest in the nation, after Pennsylvania's tax. It increases a little bit each year to keep up with inflation. This July the tax is set to go up by about 3 cents per gallon.
Democrat Gov. Gavin Newsom made a modest proposal in January, before Russia invaded Ukraine: Pause the increase for one year. In other words, don't let the tax go up by 3 cents this year. The Newsom administration described it as an effort "to potentially lower the price of gasoline" and provide some relief to consumers.
The proposal is so small that "it's not going to have an effect that anyone will notice," said Borenstein, the Berkeley economist. Drivers probably wouldn't notice, but people managing state infrastructure budgets probably would:
The plan would cost the state about $523 million in lost revenue. That would mostly wind up affecting funding for state highway projects in a couple of years, according to analysis from the Legislative Analyst 's Office.
Leaders of the majority-Democrat Legislature, which Newsom would need to get on board with his plan, aren't wild about the idea, saying "our focus cannot be a small cut to the gas tax that might not get passed on to consumers."
California Republicans have proposed wiping away the whole 51 cent tax in the short term. Last year, Republican state senators appealed to Newsom to suspend the tax completely for a year and they renewed that request in March. In January, Granite Bay Republican Kevin Kiley proposed getting rid of the tax for six months. The six-month proposal would cost the state somewhere between $4 to $4.5 billion in lost revenue, according to estimates from Assemblymember Kiley's office. In both cases, the lost tax money for infrastructure would be made up for by a one-time infusion of other state funds into infrastructure accounts.
https://calmatters.org/economy/2022/03/gas-prices-california/ 3/8 3/15/22, 4:46 PM Gas prices in California: How lawmakers plan to help - CalMatters On March 14, Kiley pushed for a procedural move to speed a vote on his bill.
The maneuver didn't receive enough votes to work but that doesn't mean the bill is dead -just that it still has to wind its way through committees in the legislature.
"The gas tax is something that we control as state lawmakers and it is one lever by which we can provide California taxpayers a bit of relief," said Kiley.
It would be impossible for a Republican to get a bill passed through the Democrat-controlled legislature without significant support from Democrats; so far a couple of Democrats have expressed interest in the proposal.
But because the tax applies to gas suppliers, the price of gas would go down only if gas sellers actually pass the savings along to consumers by reducing the price of gas. And there aren't any guarantees on how much of the savings they'd pass along.
Learn more about legislators mentioned in this story
R KEVIN KILEY +
State Assembly, District 6 (Granite Bay)
Expand for more about this legislator
In February, economists at the nonpartisan Legislative Analyst's Office reviewed research on how changes in fuel taxes affect fuel prices, said Seth Kerstein, an economist at the agency. They estimated that between twothirds to 100% of the governor's proposal - or 2 to 3 cents per gallon - would likely be passed along to people paying at the pump.
If that same estimated range applies to the Republicans' larger tax break - which the agency did not analyze -it would translate into roughly 34 to 51 cents per gallon in savings at the pump. Generally, economic theory would say that larger tax changes would get passed through in the same way as smaller ones, said James Bushnell, an energy economist at UC Davis. But gas https://calmatters.org/economy/2022/03/gas-prices-california/ 4/8 3/15/22, 4:46 PM Gas prices in California: How lawmakers plan to help - CalMatters tax changes are also generally much smaller than 51 cents, so the research has been focused on the impacts of smaller changes, he said.
That was before Russia invaded Ukraine and the sanctions on Russian companies and gas that followed threw the international gas market into flux.
Gas tax breaks "come up every time there's some kind of oil shock," said Bushnell. "And that's the absolute worst time to cut these taxes if the goal is to relieve customer prices.” Gas sellers are less likely to pass all of the savings on to customers when the supply of gas is constrained. In other words, while the war is affecting the gas supply, a gas tax cut could mean more profits for gas sellers, and less of a price reduction.
On top of that, California mav have a less competitive markei for gas distribution and retail than other states, Borenstein, the Berkeley economist has found. Far more gasoline in California "flows through stations that are owned by refiners or have long-term contracts that give the refiners significant control over gas prices," he wrote. That could make it even more likely that sellers pocket some of the savings of a gas tax break for themselves.
"While the war is affecting the gas supply, a gas tax
cut could mean more profits for gas sellers, and less
of a price reduction."
- JAMES BUSHNELL, ENERGY ECONOMIST, UC DAVIS
In addition to the question of just how much tax breaks would actually save consumers, Borenstein said reducing or getting rid of the gas tax would be bad policy.
https://calmatters.org/economy/2022/03/gas-prices-california/ 5/8 3/15/22, 4:46 PM Gas prices in California: How lawmakers plan to help - CalMatters "We need gasoline prices to reflect the real costs to society," said Borenstein, referring to the negative effects of greenhouse gas emissions, air pollution, as well as costs of cars hitting other cars, bikers, or pedestrians. When you add up all those costs, aas taxes are actually too low, he wrote in an analysis of the governor's proposal.
Checks from the state for high gas prices
During his State of the State address on Tuesday, Newsom unveiled another idea for helping Californians with high gas prices. Or, at least, the germ of an idea.
"I'll be submitting a proposal to put money back in the pockets of Californians to address rising gas prices," he said. The proposal will be a tax rebate and give billions of dollars to Californians, a spokesperson for the governor said, though it's not clear yet who exactly will get the money and how much they will get.
The money may be tied to owning a car that's registered with the state, said Dee Dee Myers, an economic advisor to Newsom. People who have switched to other modes of transit to reduce their carbon footprint aren't wild about that idea.
It could also wind up looking like the stimulus checks California sent out last year, said Chris Hoene, executive director of California Budget and Policy Center. If the last stimulus program is an indicator, the state could send out checks a couple of months after lawmakers reach an agreement, Hoene said.
Sending out checks to everyone - if lawmakers
go that route - would also be more economically
eguitable than lowering the price of gas.
https://calmatters.org/economy/2022/03/gas-prices-california/ 6/8 3/15/22, 4:46 PM Gas prices in California: How lawmakers plan to help - CalMatters Funding could come from the state's estimated $21 billion surplus. But there's a lot of "ifs" and "maybes" because most of the details still need to be worked out with the legislature.
This proposal would also ensure that money intended to reach Californians actually does, said Bushnell, the UC Davis economist.
Sending out checks to everyone -if lawmakers go that route - would also be more economically equitable than lowering the price of gas, said Borenstein.
Wealthier people use more energy than poorer people on average, so lowering the price of gas would help them more. If lawmakers send out checks, they could choose who gets how much.
A rebate could also help Californians deal with other rising costs, like rent and electricity. For most people those other costs actually make a larger dent in their bank accounts than gas, said Borenstein, but they aren't as publicly visible.
As the U.S. turns away from Russian oil, there's a fundamental reality that we'll have to make do with less fuel, said James Hamilton, an energy economist at UC San Diego. And when it comes to gas prices, Hamilton doesn't think good news is right around the corner. "I think they're headed up before they come down."
MORE ON GAS AND OIL
Soaring gas prices put California Democrats in a bind
California gas prices are the highest in the nation, posing political challenges for Newsom and lawmakers ahead of the 2022 election. ^
by Emily Hoeven MARCH 8, 2022
https://calmatters.org/economy/2022/03/gas-prices-california/ 7/8 3/15/22, 4:46 PM Gas prices in California: How lawmakers plan to help - CalMatters Grace Gedye
M [email protected]
Grace covers California's economy for CalMatters. Previously, she was an editor at the Washington Monthly. She is a graduate of Pomona College.
More by Grace Gedye
© 2022 CALMATTERS.
PROUDLY POWERED BY NEWSPACK BY AUTOMATTIC
https://calmatters.org/economy/2022/03/gas-prices-california/ 8/8 california legislature—2021–22 regular session
ASSEMBLY BILL No. 1638
Introduced by Assembly Member Kiley
January 12, 2022
An act to amend Sections 7360, 7362, 7363, and 7364 of, and to add Section 7374 to, the Revenue and Taxation Code, relating to taxation, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.
legislative counsel’s digest
AB 1638, as introduced, Kiley. Motor Vehicle Fuel Tax Law:
suspension of tax.
Existing law, the Motor Vehicle Fuel Tax Law, imposes a tax upon each gallon of motor vehicle fuel removed from a refinery or terminal rack in this state, entered into this state, or sold in this state, at a specified rate per gallon.
This bill would suspend the imposition of the tax on motor vehicle fuels for 6 months. The bill would direct the Controller to transfer a specified amount from the General Fund to the Motor Vehicle Fuel Account in the Transportation Tax Fund. By transferring General Fund moneys to a continuously appropriated account, this bill would make an appropriation.
This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2⁄3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
99 The people of the State of California do enact as follows:
line 1 SECTION 1. Section 7360 of the Revenue and Taxation Code line 2 is amended to read:
line 3 7360. (a) (1) A Except as provided in Section 7374, a tax of line 4 eighteen cents ($0.18) is hereby imposed upon each gallon of fuel line 5 subject to the tax in Sections 7362, 7363, and 7364. line 6 (2) If the federal fuel tax is reduced below the rate of nine cents line 7 ($0.09) per gallon and federal financial allocations to this state for line 8 highway and exclusive public mass transit guideway purposes are line 9 reduced or eliminated correspondingly, the tax rate imposed by line 10 paragraph (1), on and after the date of the reduction, shall be line 11 recalculated by an amount so that the combined state rate under line 12 paragraph (1) and the federal tax rate per gallon equal twenty-seven line 13 cents ($0.27).
line 14 (3) If any person or entity is exempt or partially exempt from line 15 the federal fuel tax at the time of a reduction, the person or entity line 16 shall continue to be so exempt under this section. line 17 (b) (1) On Except as provided in Section 7374, on and after line 18 July 1, 2010, in addition to the tax imposed by subdivision (a), a line 19 tax is hereby imposed upon each gallon of motor vehicle fuel, line 20 other than aviation gasoline, subject to the tax in Sections 7362, line 21 7363, and 7364 in an amount equal to seventeen and three-tenths line 22 cents ($0.173) per gallon.
line 23 (2) For the 2011–12 fiscal year and each fiscal year thereafter, line 24 the board shall, on or before March 1 of the fiscal year immediately line 25 preceding the applicable fiscal year, adjust the rate in paragraph line 26 (1) in that manner as to generate an amount of revenue that will line 27 equal the amount of revenue loss attributable to the exemption line 28 provided by Section 6357.7, based on estimates made by the board, line 29 and that rate shall be effective during the state’s next fiscal year. line 30 (3) In order to maintain revenue neutrality for each year, line 31 beginning with the rate adjustment on or before March 1, 2012, line 32 the adjustment under paragraph (2) shall also take into account the line 33 extent to which the actual amount of revenues derived pursuant to line 34 this subdivision and, as applicable, Section 7361.1, the revenue line 35 loss attributable to the exemption provided by Section 6357.7 line 36 resulted in a net revenue gain or loss for the fiscal year ending line 37 prior to the rate adjustment date on or before March 1. 99 AB 1638 — 2 —
line 1 (4) The intent of paragraphs (2) and (3) is to ensure that the act line 2 adding this subdivision and Section 6357.7 does not produce a net line 3 revenue gain in state taxes.
line 4 (5) Commencing July 1, 2019, the adjustments in paragraphs line 5 (2) and (3) shall cease, and the rate imposed by this subdivision line 6 shall be the rate in paragraph (1).
line 7 (c) On Except as provided in Section 7374, on and after line 8 November 1, 2017, in addition to the taxes imposed by subdivisions line 9 (a) and (b), a tax is hereby imposed upon each gallon of motor line 10 vehicle fuel, other than aviation gasoline, subject to the tax in line 11 Sections 7362, 7363, and 7364, in an amount equal to twelve cents line 12 ($0.12) per gallon.
line 13 (d) On July 1, 2020, and every July 1 thereafter, the board shall line 14 adjust the taxes imposed by subdivisions (a), (b), and (c), with the line 15 adjustment to apply to both to the base tax rates specified in those line 16 provisions and to any previous adjustment in rates made pursuant line 17 to this subdivision, by increasing the taxes by a percentage amount line 18 equal to the increase in the California Consumer Price Index, as line 19 calculated by the Department of Finance with the resulting taxes line 20 rounded to the nearest one-tenth of one cent ($0.01). The first line 21 adjustment pursuant to this subdivision shall be a percentage line 22 amount equal to the increase in the California Consumer Price line 23 Index from November 1, 2017, to November 1, 2019. Subsequent line 24 annual adjustments shall cover subsequent 12 month periods. The line 25 incremental change shall be added to the associated rate for that line 26 year.
line 27 (e) Any increases to the taxes imposed under subdivisions (a), line 28 (b), and (c) that are enacted by legislation subsequent to July 1, line 29 2017, shall be deemed to be changes to the base tax rates for line 30 purposes of the California Consumer Price Index calculation and line 31 adjustment performed pursuant to subdivision (d). line 32 SEC. 2. Section 7362 of the Revenue and Taxation Code is line 33 amended to read:
line 34 7362. The Except as provided in Section 7374, the tax specified line 35 in Section 7360 is imposed on the removal of motor vehicle fuel line 36 in this state from a terminal if the motor vehicle fuel is removed line 37 at the rack.
line 38 SEC. 3. Section 7363 of the Revenue and Taxation Code is line 39 amended to read:
99 — 3 — AB 1638
line 1 7363. The Except as provided in Section 7374, the tax specified line 2 in Section 7360 is also imposed on all of the following:
line 3 (a) The removal of motor vehicle fuel in this state from any line 4 refinery if either of the following applies:
line 5 (1) The removal is by bulk transfer and the refiner or the owner line 6 of the motor vehicle fuel immediately before the removal is not a line 7 licensed supplier.
line 8 (2) The removal is at the refinery rack.
line 9 (b) The entry of motor vehicle fuel into this state for sale, line 10 consumption, use, or warehousing if either of the following applies:
line 11 (1) The entry is by bulk transfer and the enterer is not a licensed line 12 supplier.
line 13 (2) The entry is not by bulk transfer.
line 14 (c) The removal or sale of motor vehicle fuel in this state to an line 15 unlicensed person unless there was a prior taxable removal, entry, line 16 or sale of the motor vehicle fuel.
line 17 (d) The removal or sale of blended motor vehicle fuel in this line 18 state by the blender thereof. The number of gallons of blended line 19 motor vehicle fuel subject to tax is the difference between the total line 20 number of gallons of blended motor vehicle fuel removed or sold line 21 and the number of gallons of previously taxed motor vehicle fuel line 22 used to produce the blended motor vehicle fuel. line 23 SEC. 4. Section 7364 of the Revenue and Taxation Code is line 24 amended to read:
line 25 7364. The Except as provided in Section 7374, the tax specified line 26 in Section 7360 is imposed as a backup tax as follows:
line 27 (a) On the delivery into the fuel tank of a motor vehicle line 28 fuel-powered highway vehicle of:
line 29 (1) Any motor vehicle fuel on which a claim for refund has been line 30 allowed; or
line 31 (2) Any liquid on which tax has not been imposed by this part, line 32 Part 3 (commencing with Section 8601), or Part 31 (commencing line 33 with Section 60001).
line 34 (b) On the sale of any motor vehicle fuel on which a claim for line 35 refund has been allowed.
line 36 (c) On the sale and delivery into the fuel tank of a motor vehicle line 37 fuel-powered highway vehicle of any liquid on which tax has not line 38 been imposed by this part, Part 3 (commencing with Section 8601), line 39 or Part 31 (commencing with Section 60001).
99 AB 1638 — 4 —
line 1 SEC. 5. Section 7374 is added to the Revenue and Taxation line 2 Code, to read:
line 3 7374. (a) The imposition of taxes under Sections 7360, 7362, line 4 7363, and 7364 is suspended for the period beginning on the line 5 effective date of this section and ending on the date six months line 6 after the effective date of this section.
line 7 (b) The Controller, no later 60 days after the effective date of line 8 this section, shall transfer an amount equal to one-half of the line 9 amount collected pursuant to Sections 7360, 7362, 7363, and 7364 line 10 in the 2020–21 fiscal year from the General Fund to the Motor line 11 Vehicle Fuel Account in the Transportation Tax Fund. This transfer line 12 amount is continuously appropriated in accordance with Section line 13 8352.
line 14 SEC. 6. This act is an urgency statute necessary for the line 15 immediate preservation of the public peace, health, or safety within line 16 the meaning of Article IV of the California Constitution and shall line 17 go into immediate effect. The facts constituting the necessity are:
line 18 In order to provide much needed relief to Californians struggling line 19 with inflation, high gas prices, and high unemployment rates, it is line 20 necessary for this to take immediate effect.
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99 — 5 — AB 1638
CITY COUNCIL AGENDA REPORT
TO: MAYOR GREENOUGH AND MEMBERS OF THE CITY COUNCIL
FROM: ERIC WIER, CITY MANAGER
DATE: MARCH 21, 2022
SUBJECT: SELECTION OF COUNCIL MEMBER FOR FIRE CHIEF INTERVIEW PANEL
RECOMMENDATION
• Hear staff report
• Technical questions from the Council
• Receive public comment
• Further Council discussion
• Select a Council Member to be a panelist for the Fire Chief interview
BACKGROUND
Crescent City and the Crescent Fire Protection District provide fire and emergency services to the greater Crescent City area under a joint agreement. One of the provisions of that agreement is that the City employs the Fire Chief, who then serves the Fire District also, and the District reimburses the City for half of the wages and benefits cost of the position.
ANALYSIS
With the pending retirement of Fire Chief Gillespie on June 16th, the City of Crescent City and Crescent Fire Protection District are currently involved with the hiring process for a new Fire Chief to serve both jurisdictions. The application period closed at 5:00 PM on March 1st, and four application packets were received. Applicants participated in a first round of interviews on Wednesday, March 16th. This first interview was a professional and community panel made up of representatives of the fire service, law enforcement, emergency medical services, emergency operations, and the County.
Applicants who have been invited to continue in the selection process will participate in a second interview. For this second interview, staff is requesting one City Council Member be appointed to participate as a panel member. A member of the Crescent Fire Protection District Board will also be appointed to sit on this panel, along with the City Manager and Fire Chief Gillespie. This second interview panel will be tasked with recommending one candidate as to serve as the next Fire Chief to serve Crescent City Fire & Rescue, the City of Crescent City, and Crescent Fire Protection District. m
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FIRE CHIEF INTERVIEWS
March 21, 2022
2 The second interview is tentatively scheduled for Thursday, March 31st. When Chief Gillespie was hired, the second interview was with staff and a third interview was conducted by members of the Fire Department 2x2 committee with the final applicant.
Each committee then made a recommendation to its respective board. The Crescent Fire Protection District Board recommended that the City hire then-candidate Bill Gillespie and the City Council approved the employment contract. This year’s interview schedule will bring board representation and council representation earlier in the process. One board member and one council member will take part in the second (final) interview to recommend the candidate to be offered the position as the next Fire Chief. Once a conditional offer is made, the selected candidate will have to undergo a medical exam and background review. An employment agreement then will be brought before the entire Fire Board for recommendation and City Council for approval, in a joint Meeting.
FISCAL ANALYSIS
There is no fiscal impact to appointing a Council member to serve on the interview panel.