Industry Topics for the Oil Spill Prevention and Administration Fee & Oil Spill Response Fee
Definitions
- Barrel
- 42 gallons of crude oil, petroleum products, or renewable fuel.
- Crude Oil
- Petroleum in an unrefined or natural state, including condensate and natural gasoline, and substances that enhance, cut, thin, or reduce viscosity.
- Petroleum products
- Any liquid hydrocarbon at atmospheric temperature and pressure that is the product of the fractionation, distillation, or other refining or processing of crude oil and that is used as, useable as, or may be refined as, a fuel or fuel blendstock, including, but not limited to, gasoline, diesel fuel, aviation fuel, bunker fuel, and renewable fuels containing more than five percent petroleum products.
As of July 22, 2021, the definition of petroleum products is changed to remove reference to alcohol fuels that contain petroleum products and includes renewable fuels containing more than five percent petroleum products. - Renewable fuel
- Any liquid produced from nonpetroleum renewable resources that is used or useable as a fuel, or such liquid that may be blended with other types of fuels. Renewable fuel includes fuels that may contain up to five percent (5%) petroleum products. An example of renewable fuel is denatured ethanol.
- Marine Terminal
- Any facility used for transferring crude oil, petroleum products, or renewable fuel to or from tankers or barges. A marine terminal includes all piping not integrally connected to a tank facility as defined in the Health and Safety Code § 25270.2, subdivision (n).
- Refinery
- A facility that refines crude oil, including condensate and natural gasoline, into petroleum products, lubricating oils, coke, or asphalt and that may blend nonpetroleum products with refined products either in the refinery or as the petroleum products are shipped from the refinery or from adjacent storage facilities.
- Renewable Fuel Production Facility
- A facility that produces renewable fuel for blending or shipment.
- Renewable Fuel Receiving Facility
- A facility that is the first point of receipt in California for renewable fuel that originated from outside California, that receives renewable fuel delivered by railroad car, tank truck, pipeline, or vessel. A renewable fuel receiving facility may include, but is not limited to, a refinery, a marine terminal, a railroad tank car to tank truck transfer facility, or other storage and distribution facility.
- State waters or waters of the state
- Any surface water, including saline waters, marine waters, and freshwaters, within the boundaries of the state but does not include groundwater.
Petroleum Products Derived from Crude Oil Refined in California
A marine terminal operator, a refinery operator, or a renewable fuel production facility operator receiving petroleum products derived from crude oil refined in California or receiving renewable fuel produced in California, may presume the fee has been previously collected.
Deductions
For the OSPA fee, the number of barrels you received with the fee already paid can be deducted on your return CDTFA-501-OA, Oil Spill Prevention and Administration Fee Return.
Documentation to support fees that have already been paid must be retained in your records for four years for all crude oil barrels claimed as fee-paid.
There are no deductions available under the OSR fee.
Bonded Jet Fuel Exclusion
Bonded jet fuel received at a marine terminal and then used in international flights is not subject to the OSPA fee or the OSR fee. To qualify for this exclusion, the fuel must enter California under bond pursuant to federal law and regulation and remain under bond in segregated storage until it is shipped by pipeline to an airport facility where it is used exclusively on international flights.
Invoicing Requirements
If you are a registered marine terminal operator, refinery operator, renewable fuel production facility operator, and/or a renewable fuel receiving facility operator, you are required to collect the oil spill fee from the owners of the crude oil, petroleum products, or renewable fuel on applicable transactions.
On any transaction or activity that would result in an oil spill fee liability, you must separately state the fee amount you collect on the invoice provided to the owner of the crude oil, petroleum products, or renewable fuel. You must also separately state the fee amount you collect on the shipping documents provided to another marine terminal operator, refinery operator, renewable fuel production facility operator, or renewable fuel receiving facility operator on any transaction or activity that would result in an oil spill fee liability.
Excess Fee Reimbursement
The law does not prohibit a feepayer from including the fee expense in the costs for services provided or in the products it sells; similar to how sellers commonly include expenses for processing, transportation, and marketing in their products' cost. However, the fee must not be separately stated as a charge for reimbursement on a transaction or activity that does not result in a fee liability. A separately stated fee reimbursement charge or fee charge on a transaction or activity that does not result in a fee liability is considered excess fee reimbursement.
Excess fee reimbursement is defined as any amount charged by a feepayer on an activity or transaction that does not result in an oil spill fee liability or is more than the fee due and represented as an oil spill fee reimbursement. Excess fee reimbursement must be paid to us, unless refunded by the feepayer to their customer.
Exported Crude Oil, Petroleum Products, or Renewable Fuel
The law does not provide for a credit for the export of crude oil, petroleum products, or renewable fuel on which the fee was paid. The fee is imposed on the receipt of the crude oil, petroleum products, or renewable fuel, or the shipment of renewable fuel from a renewable fuel production facility, not upon the subsequent sale or shipment.
Fuel Grade Ethanol, Biodiesel Blends
Fuel grade ethanol denatured with five percent (5%) or less petroleum products and biodiesel blends (B95 and lower) are included in the definition of renewable fuel effective July 22, 2021 provided in Revenue and Taxation Code (RTC) section 46024. Renewable fuel blends that contain more than five percent (5%) petroleum products are considered petroleum products (RTC 46021). Fuel grade ethanol was considered a petroleum product according to Regulation 2240, Petroleum Products, until July 22, 2021, and therefore, subject to the OSPA fee until July 22, 2021.
Renewable Fuel Receipts Between July 22, 2021 through December 31, 2021
Although the definition of renewable fuel became effective July 22, 2021, renewable fuel received from July 22, 2021, through December 31, 2021 is not subject to the OSPA fee. Renewable fuel is subject to the OSPA fee starting January 1, 2022.
Marine terminal operators or refinery operators should not charge or collect the OSPA fee on renewable fuel (as defined above) for this period. If you did collect the OSPA fee from your customer on renewable fuel for this period and paid it to us, you may file a claim for refund or amend your OSPA fee return online after you refund the excess fee back to your customer.