1. State Lands Commission Mineral Resources Management Division

2. State Lands CommissionRevenue Sources and Distribution David Mercier Chief, MRM Finance and Accounting

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

4. State Lands Commission Divisions Executive Officer Paul Thayer Legal Mineral ResourcesManagement Land Management Fiscal and Information Systems Marine Facilities Environmental Planning and Management Human Resources and Records Management 4

5. Public Land Management • Two Types of Land: • Sovereign • 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 • Approximately 5.5 million acres throughout the State. • This was a grant to California by congress in 1853 to benefit education. 5

6. State Tidelands Leases • Offshore Oil & Gas Leases • 31 leases on over 58,000 acres offshore California • Santa Barbara, Ventura, Orange, Los Angeles, counties • Current Royalties from 16.7% - 55% • Revenue over $400 million/yr 6

7. State Lands CommissionMission • Provide stewardship of lands, waterways, and resources entrusted to its care through: • Economic development • Protection • Preservation • And Restoration 7

8. Mineral Resources Management Division Paul Mount Chief Greg ScottAsst. Chief Operations andCompliance Pete Johnson Planningand Development Marina Voskanian Engineering James Hemphill Finance and Economics David Mercier 8

9. MRMD FUNCTIONS • Manage • Offshore oil and gas leases • Onshore State hard rock mineral resources • State School Lands mineral resources to include geothermal • Inspection and audits of all oil, gas, geothermal, and mineral extraction facilities on State lands • Financial audits of state leases and royalty revenue collection • Assist other divisions with engineering, geological, and financial expertise 9

10. State of California Long Beach: > $5.6 billion Total: > $8.0 billion City of Long Beach Over $450 million Can only be used on projects within the Tidelands area. Projects include: Harbor Convention Center Beaches Belmont Pool Parks Tidelands RevenueSince 1930 10

11. Biggest Driver of State Lands Commission Revenue Feb 9, 1999 Low: $11.68/BO 11

12. California’s Oil Production 2.5%/yr 2.5%/Yr 12

13. State Lands Commission Oil Production 4%/Yr 13

14. State Lands Commodities • Oil/Gas • Electricity/Geothermal Energy • Aggregate • Talc • Granite • Gold • Borate • Uranium 14

15. State Lands Revenue 15

16. CA State Budget Compared to CSLC Revenue 9% 8.2% 16

17. State Lands CommissionRevenue 17

18. State Lands RevenueFYE 1930 to 2007 18

19. Revenue DistributionFrom 1980 19

20. Revenue Distribution 20

21. City of Long BeachFunding • Belmont Pier • Marinas • Fireboats • City Employees Working on Tidelands Projects 21

22. Long Beach Queen Mary Belmont Pool Port of Long Beach Convention Center 22

23. California Needs Money!

24. State of CaliforniaRevenue Sources Top Three: ~81%

25. State of CaliforniaExpenditures Top Five: ~83%

26. Conclusion • Since 1930,the State Lands Commission staff working with industry has contributed more than $8.0 billion to California. • This doesn’t include the billions of dollars of income, property, production, other tax revenue and job creation benefits. • In Long Beach, over $450 million helped fund the: • Port of Long Beach; • Convention Center; • Belmont Pool; • Belmont Pier; • Marina; • Fireboats; • Queen Mary; • And pay for many salaries. 26

27. Conclusion • Statewide contributions to the: • General Fund: education, health and welfare, and corrections and rehabilitation; • School buildings; • California water projects; • Energy projects; • Parks; • Housing; • Salmon & steelhead trout restoration; • Department of Fish and Game; • Marine life projects; • Santa Monica Mountain Conservancy; • And many more. • California really needs money! 27

28. Budget Info • ~$17B deficit • Sell $15B bonds over 3.0 years (paid back out of lottery revenue) • Sell future profits or securitize • Prop 37 (1984) • Total: $3.3 billion (plan to increase, bigger jackpots) • Prizes: $1.65 billion (50%) • Operating Exp: $0.45 billion (16%) • Education: $1.2 billion (34%) • Sales Tax • 7.5% to 8.5%: ~$3.5 billion/year (back stop funding?)

29. Lottery Funds

30. Extra Information • California: ~100 million acres (CSLC is 10%) • Education: ~$12,000 per child • Budget: ½ $500 million ~$250 million (~21,000 children per yr)

31. Dilbert

32. School Prop 98 • Three tests: • 39% of the budget • Prior year per capita • Bad years: 0.5% general funds ???