KernTax Backs AB 2716 to Restore Responsible Oilfield Transactions

The Kern County Taxpayers Association (KernTax) has joined the growing local government and taxpayer coalition supporting AB 2716 by Assemblymember Anamarie Ávila Farías, CIPA’s sponsored legislation to repair the oilfield transaction freeze created by AB 1167 in 2023. In its letter of support, KernTax makes the case plainly: California needs stronger financial assurance for plugging, abandonment, decommissioning, and site restoration, but it also needs a functioning market that allows responsible operators to buy, sell, finance, and steward oil and gas assets.

That is the balance AB 2716 strikes.

AB 1167 was sold as an accountability measure, but in practice it locked up the market for oil wells and production facilities. Instead of encouraging responsible transfers to better-capitalized operators, the law made those transactions nearly impossible in many cases. That does not protect taxpayers. It traps assets, discourages investment, depresses value, and increases the chance that wells remain with operators that may not have the financial capacity to manage them for the long haul.

AB 2716 fixes that problem without walking away from accountability. The current bill summary explains that AB 2716 would restore flexibility by allowing approved forms of financial assurance, including self-insurance and corporate guarantees, while also requiring enforceable security agreements, plugging and abandonment schedules, notification requirements when an operator’s financial condition changes, and periodic CalGEM review of whether the financial assurance remains adequate. The bill also repeals the current exclusion on self-insurance and corporate guarantees for operators acquiring wells or production facilities, subject to CalGEM approval and statutory guardrails.

KernTax’s support is especially important because this is not just an oil and gas issue. It is a property tax issue. It is a county budget issue. It is a schools, public safety, special districts, and local services issue.

In its support letter, KernTax warned that Kern County’s tax base remains heavily dependent on the energy sector and that declining production, operator insolvencies, and distressed assets create direct fiscal consequences for local governments, schools, and special districts. The letter also explains that the experience following AB 1167 showed how regulatory conditions can accelerate reductions in taxable value, increase valuation disputes, pressure assessment appeals boards, and create uncertainty for future local revenues.

That is why support from KernTax, Kern County, and the California Assessors’ Association matters. These organizations live in the real world of tax rolls, public finance, asset valuation, and local government services. They understand that a frozen market is not a safer market. It is just a market with fewer buyers, fewer financing options, less investment, and more risk migrating back to taxpayers.

AB 2716 also comes at the right moment. According to the bill’s legislative history, AB 2716 passed the Assembly and was referred on June 10, 2026, to the Senate Natural Resources and Water Committee. The next stop gives lawmakers a clear choice: keep AB 1167’s transaction freeze in place or adopt a more responsible structure that protects taxpayers while allowing financially capable operators to manage California oilfield assets.

For California’s independent producers, this is basic blocking and tackling. Wells and facilities do not become safer because Sacramento makes them harder to sell. They become safer when responsible operators have access to capital, clear rules, enforceable obligations, and practical financial assurance tools. AB 2716 provides that framework.

CIPA Perspective: AB 2716 is a necessary correction to AB 1167. It restores a functioning market for oil wells and production facilities while strengthening financial security and keeping operators accountable for end-of-life obligations. With support from KernTax, Kern County, and the California Assessors’ Association, the Legislature should recognize AB 2716 for what it is: a taxpayer protection bill, a local government revenue protection bill, and a responsible oilfield stewardship bill.