Lawmaker&’s controversial proposal to tax oil extraction in California and give most of the new revenue to higher education narrowly survived a crucial test Thursday at the state Capitol.

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SACRAMENTO — A North Coast lawmaker's controversial proposal to tax oil extraction in California and give most of the estimated billions in new revenue to higher education narrowly survived a crucial test Thursday at the state Capitol.

The Senate Education Committee approved SB 1071, authored by Sen. Noreen Evans, D-Santa Rosa, by a 5-3 vote, the minimum number of votes needed to move the bill along.

Evans is proposing a 9.5 percent severance tax on the extraction of oil in California, which the senator estimates will generate about $2 billion annually. That estimate is based on the average price of $100 for a barrel for crude oil.

The tax revenue would go into an endowment fund, with half allocated to the state's three higher education systems, and the rest divided equally between the California parks system and health and human services programs.

Opponents of the bill say a severance tax would reduce oil production, cost jobs and raise oil and gas prices.

About 30 people, including students from California's colleges and universities, testified Thursday in favor of the bill, which also has drawn support from the California Teachers Association and Sonoma County Board of Supervisors.

Harrison "Jack" Tibbetts, a Montgomery High School graduate and senior at UC Berkeley who is leading the statewide coalition, told committee members that even if they had reservations about the bill, they should approve it anyway in order to "continue this discussion."

But even he had his doubts.

"Going into the committee hearing today we were not expecting the bill to pass," Tibbetts said.

The outcome remained uncertain for most of the day while lawmakers waited for a quorum on the education committee in order to vote. The downtime allowed Tibbetts and a group of bill supporters to make one more sweep through the Capitol building to lobby three committee members — all Democrats — who were said to be on the fence.

Tibbetts urged the group to be "diplomatic" in their interactions with lawmakers.

"Just remember, politicians won't do anything for you unless they like you," he said.

One of the three lawmakers, Sen. Ben Hueso, D-San Diego, ended up supporting the bill, providing the crucial fifth vote needed for the bill to pass the committee. It now heads to the Governance and Finance Committee and possibly a step closer to voting by the full Senate.

"It was a wonderful victory for us, but now our collective focus will be to get senate leadership to move this through .<TH>.<TH>. committee and on to the Senate floor. The fight continues," Tibbetts said.

The bill's ultimate fate remains in doubt. Evans has failed twice since 2009 to get similar legislation passed. California voters also turned down Proposition 87 in 2006 that would have taxed oil extraction mainly for the purposes of funding alternative energy.

However, Evans testified Thursday that her efforts have continued to gain support, gesturing to the audience of mostly students who were there to support her latest attempt.

She said the bill might not pass the Senate, "but this is not the end of it."

California's oil industry and business interests remain steadfastly opposed to the bill, which they argue would send jobs and production out of the state.

Such a tax "would cost thousands of jobs in California," Kern County Supervisor David Couch told the committee.

He said 70 percent of California's crude oil and 60 percent of the state's natural gas come from his Central Valley community, which he said has an unemployment rate of 13 percent, higher than the state's average.

"A tax on crude oil is a tax on Kern County," Couch said.

Mike Gipson, a councilman in the southern California city of Carson and a state Assembly candidate, said the severance tax would be a "direct hit" on the city's general fund by "essentially making oil less profitable to extract, which would reduce the amount of property tax that could be collected."

Like cities elsewhere, Carson uses such revenues to fund public safety and other essential city services.

Republican Senate Leader Bob Huff, a member of the education committee, cited in his opposition to the bill a risk the tax money would be used for purposes other than what supporters intended it for.

<NO1><NO>California's oil industry argues that it already pays about $6 billion annually in corporate, property and other taxes, as well as fees to fund state regulation. That's aside from royalty payments to the state, which total about $500 million annually.

Evans, however, argued that the state's oil industry has been "getting off for free" while everyone else in California has seen higher tax bills.

The senator and supporters of her bill have said that California, which produces about 550,000 barrels of oil a day, is the only major oil-producing U.S. state that does not levy a severance tax on the enterprise. However, an oil industry representative testified Thursday that three other states — Colorado, Pennsylvania and Illinois — already impose such taxes.

Evans conceded that Colorado and Pennsylvania have such taxes. But she said "they call it something different."

(You can reach Staff Writer Derek Moore at 521-5336 or derek.moore@pressdemocrat.com. On Twitter @deadlinederek.)