California State Lands CommissionMineral Resources Management State Lands

California State Lands Commission—Mineral Resources Management State Lands Commission Mineral Resources Management Division

California State Lands Commission—Mineral Resources Management State Lands Commission Revenue Sources and Distribution David Mercier Chief, MRM Finance and Accounting

California State Lands Commission—Mineral Resources Management State Lands Commission Background u The State Lands Commission was established in 1938 with authority prescribed in Division 6 of the California Public Resources Code. u The members include: u u u Lieutenant Governor (Elected) u John Garamendi State Controller (Elected) u John Chiang State Director of Finance (Appointed by the Governor) u Michael Genest u Anne Sheehan (Director of Policy, delegated commission member) u Commission staff: u More than 200 specialists in mineral resources, land management, boundary determination, petroleum engineering and natural sciences. u The Executive Officer: u Paul Thayer is appointed by the Commission 11/4/2020 3

California State Lands Commission—Mineral Resources Management State Lands Commission Divisions Executive Officer Paul Thayer Legal Land Management Mineral Resources Management Fiscal and Information Systems Environmental Planning and Management Marine Facilities Human Resources and Records Management 11/4/2020 4

California State Lands Commission—Mineral Resources Management Public Land Management u Two Types of Land: u Sovereign u u u Approximately 4 million acres Include beds of California’s naturally navigable rivers, lakes and streams State’s tide and submerged lands along more than 1, 100 miles of coastline, extending three miles offshore. More than 120 rivers and sloughs, 40 lakes and the State’s coastal waters. School u u Approximately 5. 5 million acres throughout the State. This was a grant to California by congress in 1853 to benefit education. 11/4/2020 5

California State Lands Commission—Mineral Resources Management State Tidelands Leases u Offshore Oil & Gas Leases u 31 leases on over 58, 000 acres offshore California u Santa Barbara, Ventura, Orange, Los Angeles, counties u Current Royalties from 16. 7% 55% u Revenue over $400 million/yr 11/4/2020 6

California State Lands Commission—Mineral Resources Management State Lands Commission Mission u Provide stewardship of lands, waterways, and resources entrusted to its care through: u Economic development u Protection u Preservation u And Restoration 11/4/2020 7

California State Lands Commission—Mineral Resources Management Division Paul Mount Chief Greg Scott Asst. Chief Planning and Development Marina Voskanian Engineering James Hemphill Operations and Compliance Pete Johnson Finance and Economics David Mercier 11/4/2020 8

California State Lands Commission—Mineral Resources Management MRMD FUNCTIONS u Manage u Offshore oil and gas leases u Onshore State hard rock mineral resources u State School Lands mineral resources to include geothermal u Inspection and audits of all oil, gas, geothermal, and mineral extraction facilities on State lands u Financial audits of state leases and royalty revenue collection u Assist other divisions with engineering, geological, and financial expertise 11/4/2020 9

California State Lands Commission—Mineral Resources Management Tidelands Revenue Since 1930 u State of California u Long Beach: > $5. 6 billion u Total: > $8. 0 billion u City of Long Beach u Over $450 million u Can only be used on projects within the Tidelands area. Projects include: u Harbor u Convention Center u Beaches u Belmont Pool u Parks 11/4/2020 10

California State Lands Commission—Mineral Resources Management Biggest Driver of State Lands Commission Revenue Feb 9, 1999 Low: $11. 68/BO 11/4/2020 11

California State Lands Commission—Mineral Resources Management California’s Oil Production 2. 5%/Yr 2. 5 %/yr 11/4/2020 12

California State Lands Commission—Mineral Resources Management State Lands Commission Oil Production 4%/Yr 11/4/2020 13

California State Lands Commission—Mineral Resources Management State Lands Commodities u Oil/Gas u Electricity/Geothermal Energy u Aggregate u Talc u Granite u Gold u Borate u Uranium 11/4/2020 14

California State Lands Commission—Mineral Resources Management State Lands Revenue 11/4/2020 15

California State Lands Commission—Mineral Resources Management CA State Budget Compared to CSLC Revenue 9% 8. 2% 11/4/2020 16

California State Lands Commission—Mineral Resources Management State Lands Commission Revenue From FY 1930 to 2007 Oil/Gas Sovereign Lands School Lands Total Percent Long Beach $5, 584, 965, 921 $0 $5, 584, 965, 921 70. 2% State Tidelands $1, 776, 513, 228 $3, 113, 026 $1, 779, 626, 254 22. 4% $189, 910, 958 $0 $189, 910, 958 2. 4% $7, 551, 390, 106 $3, 113, 026 $7, 554, 503, 132 94. 9% Sovereign Lands School Lands Total Percent $166, 728, 405 $8, 711, 902 $175, 440, 306 2. 2% Geothermal $1, 655, 274 $166, 486, 742 $168, 142, 017 2. 1% Mineral Royalties $30, 924, 781 $8, 775, 310 $39, 700, 091 0. 5% Other $10, 082, 227 $0 $10, 082, 227 0. 1% $89, 300 $11, 247, 318 $11, 336, 618 0. 1% $209, 479, 986 $195, 221, 272 $404, 701, 258 5. 1% $7, 760, 870, 093 $198, 334, 298 $7, 959, 204, 391 Bids/Bonuses Total Other Surface Rentals Land Sales Total Grand Total 100. 0% 11/4/2020 17

California State Lands Commission—Mineral Resources Management State Lands Revenue FYE 1930 to 2007 11/4/2020 18

California State Lands Commission—Mineral Resources Management Revenue Distribution From 1980 Dollars Percentage General Fund $2, 054, 787, 114 36. 98% Special Account for Capital Outlay $1, 428, 022, 916 25. 70% State School Building Lease/Purchase Fund $600, 000 10. 80% Capital Outlay Fund for Public Higher Education $463, 272, 000 8. 34% Energy and Resources Fund $258, 315, 000 4. 65% Natural Resources Infrastructure Fund $200, 246, 462 3. 60% Calif Water Fund (Fisheries Restoration Account) $134, 000 2. 41% State Parks and Recreation Fund $122, 217, 000 2. 20% Oil Trust Fund $111, 072, 138 2. 00% Calif Housing Trust Fund $50, 742, 000 0. 91% Salmon & Steelhead Trout Restoration Acct $38, 034, 440 0. 68% State Transportation Fund $25, 000 0. 45% Central Valley Water Project Construction Fund $20, 000 0. 36% Fish & Game Preservation Fund $11, 250, 000 0. 20% Marine Life and Marine Reserve Mgt Acct $7, 100, 000 0. 13% Santa Monica Mountain Conservancy Fund $5, 000 0. 09% Off Highway Vehicle Fund $1, 000 0. 02% $5, 530, 063, 071 100% 19 11/4/2020 All Funds

California State Lands Commission—Mineral Resources Management Revenue Distribution 11/4/2020 20

California State Lands Commission—Mineral Resources Management City of Long Beach Funding u Belmont Pier u Marinas u Fireboats u City Employees Working on Tidelands Projects 11/4/2020 21

California State Lands Commission—Mineral Resources Management Long Beach Queen Mary Belmont Pool Convention Center Port of Long Beach 11/4/2020 22

California State Lands Commission—Mineral Resources Management California Needs Money!

California State Lands Commission—Mineral Resources Management State of California Revenue Sources Top Three: ~81%

California State Lands Commission—Mineral Resources Management State of California Expenditures Top Five: ~83%

California State Lands Commission—Mineral Resources Management Conclusion u Since 1930, the State Lands Commission staff working with industry has contributed more than $8. 0 billion to California. u This doesn’t include the billions of dollars of income, property, production, other tax revenue and job creation benefits. u In Long Beach, over $450 million helped fund the: u Port of Long Beach; u Convention Center; u Belmont Pool; u Belmont Pier; u Marina; u Fireboats; u Queen Mary; u And pay for many salaries. 11/4/2020 26

California State Lands Commission—Mineral Resources Management Conclusion u Statewide contributions to the: General Fund: education, health and welfare, and corrections and rehabilitation; u School buildings; u California water projects; u Energy projects; u Parks; u Housing; u Salmon & steelhead trout restoration; u Department of Fish and Game; u Marine life projects; u Santa Monica Mountain Conservancy; u And many more. u California really needs money! u 11/4/2020 27

California State Lands Commission—Mineral Resources Management Budget Info u ~$17 B deficit u Sell $15 B bonds over 3. 0 years (paid back out of lottery revenue) u Sell future profits or securitize u Prop 37 (1984) u Total: $3. 3 billion (plan to increase, bigger jackpots) u Prizes: $1. 65 billion (50%) u Operating Exp: $0. 45 billion (16%) u Education: $1. 2 billion (34%) u Sales Tax u 7. 5% to 8. 5%: ~$3. 5 billion/year (back stop funding? )

California State Lands Commission—Mineral Resources Management Lottery Funds

California State Lands Commission—Mineral Resources Management Extra Information u California: ~100 million acres (CSLC is 10%) u Education: ~$12, 000 per child u Budget: ½ $500 million ~$250 million (~21, 000 children per yr)

California State Lands Commission—Mineral Resources Management Dilbert

California State Lands Commission—Mineral Resources Management School Prop 98 u Three tests: u 39% of the budget u Prior year per capita u Bad years: 0. 5% general funds ? ? ?