Assessors Join Growing Coalition Supporting CIPA’s AB 2716 Bonding Fix Bill

Support for CIPA-sponsored AB 2716 (Avila Farías) continues to expand as local government officials directly responsible for property tax administration are now weighing in on the bill's importance. Following Kern County's recent support, the California Assessors’ Association and San Luis Obispo County Assessor Tom J. Bordonaro, Jr. have joined the growing coalition backing AB 2716 and urging lawmakers to advance the measure.

The support from county assessors is particularly significant because these officials are on the front lines of implementing the unintended consequences of AB 1167. As assessors evaluate oil and gas properties throughout California, they have been forced to grapple with the dramatic loss of marketability caused by AB 1167's transfer and bonding requirements. According to CIPA's analysis, these impacts are now translating into an estimated $130 million annually in lost local ad valorem property tax value statewide, with cumulative losses approaching $390 million over the 2024, 2025, and 2026 tax years. These losses directly affect counties, cities, schools, special districts, and public safety services that depend on local property tax revenues.

A critical turning point in this discussion came when the California State Board of Equalization issued guidance to county assessors regarding the valuation impacts of AB 1167. The BOE advised assessors that the financial obligations imposed by the law must be considered when valuing oil and gas properties, even when ownership has not changed. According to Assessor Bordonaro, the practical effect is that many petroleum properties face significant reductions in assessed value, further eroding local tax revenues.

In his support letter, Assessor Bordonaro explains that AB 2716 is necessary not only to facilitate the safe plugging and abandonment of wells but also to preserve the assessable value of oil and gas properties. He notes that the current financial assurance requirements established under AB 1167 have proven commercially unavailable and unattainable in today's surety marketplace, effectively freezing lawful transactions and preventing assets from moving into the hands of operators best positioned to manage, maintain, and ultimately retire them responsibly.

This concern mirrors the position previously advanced by Kern County, which warned that AB 1167 has created severe economic and fiscal disruptions throughout California's oil-producing regions. Together, county governments and assessors are delivering a consistent message: while protecting taxpayers from future orphan well liabilities is an important objective, California's current framework has unintentionally damaged local government finances, reduced property values, and halted the normal transfer of producing assets.

AB 2716 addresses these concerns by aligning transfer requirements with the financial assurance framework established under AB 1057, while preserving operator responsibility, bonding obligations, and idle well requirements. Rather than eliminating protections, the bill restores a workable pathway for responsible transactions to occur, helping assets retain their market value and remain productive contributors to local tax rolls.

As the bill continues moving through the Legislature, the growing support from county assessors and local governments reinforces one of CIPA's central arguments: AB 2716 is not simply an oil and gas policy bill. It is also a local government finance measure. By restoring market functionality and preserving property values, the bill helps protect the revenues that fund California's schools, first responders, public health programs, and essential county services.

With support now coming from Kern County, San Luis Obispo County Assessor Tom Bordonaro, and the California Assessors’ Association, AB 2716 continues to demonstrate broad recognition that California must correct the unintended consequences of AB 1167 before additional local tax revenue losses accumulate and further strain county budgets.