Legislature Heads Home, but CIPA’s Work on AB 2716 Continues

The California Legislature is now on summer recess and will reconvene on Monday, August 3, according to the Assembly’s legislative schedule. For lawmakers, that means a month away from regular session in Sacramento. For CIPA, the work continues.

At the top of the list is AB 2716, CIPA’s number one legislative priority for the remainder of the 2026 session.

The bill has already cleared the Assembly and the Senate Natural Resources and Water Committee. Its next stop is the Senate Appropriations Committee, where the debate shifts squarely to dollars and cents and the fiscal consequences of California’s current policy.

That is exactly where AB 2716 has a compelling story to tell.

Since AB 1167 took effect, oil and gas property transactions across California have virtually ground to a halt. The law requires full-cost bonding when wells and production facilities are transferred, effectively making many otherwise legitimate transactions financially impossible. The result is not merely a problem for oil producers. It is a growing fiscal problem for counties, schools, special districts and other local public services that depend on property tax revenues generated by California oil and gas properties.

The estimated loss is approximately $130 million every year in local property-tax revenue, because AB 1167 has dramatically reduced the value of oil-producing properties throughout California.

This is not a theoretical concern. The California State Board of Equalization issued an official Letter to Assessors on Petroleum Property Bonding Requirements explaining how the bonding costs imposed by AB 1167 must be considered when valuing petroleum properties for property-tax purposes. In plain English, the state itself has acknowledged that these enormous bonding obligations affect the market value of oil and gas properties.

And when property values fall, local tax revenues fall with them.

That will be a central focus of CIPA’s work during the summer recess as AB 2716 prepares for Senate Appropriations. The fiscal committee must consider not only what a bill might cost the state, but what the status quo is already costing California's local governments. In this case, the price tag is substantial and recurring: approximately $130 million in lost local property-tax revenue each year.

AB 2716 offers a responsible correction. It preserves meaningful financial assurance and protects taxpayers while restoring workable options such as self-insurance and corporate guarantees. It also provides a path for legitimate transactions that can place mature wells into the hands of operators with the expertise and economic incentive to continue production, extend well life and ultimately fulfill plugging and abandonment obligations.

The alternative is the paralysis created by AB 1167: no transactions, lower property values, declining local tax revenues and fewer opportunities to keep California wells in responsible hands.

CIPA will use the summer recess to continue building support for AB 2716, working with legislators, local government officials, county assessors and other stakeholders to make the fiscal case before lawmakers return to Sacramento on August 3.

Other CIPA priorities remain active as well, including AB 2711, Assemblymember Stan Ellis’ permitting accountability legislation, which would establish clear timelines for CalGEM to act on permit applications. But there is no ambiguity about CIPA’s number one legislative objective heading into the final weeks of session.

AB 2716 is the priority. The Legislature may be on vacation. CIPA is not.