This measure imposes a 15 percent “severance tax” on the value of all oil and gas extracted in California or its state offshore waters, which extend out three miles from the coastline. Oil and gas produced in federal waters would be exempt, and wells capable of producing less than ten barrels per day of oil or 60,000 cubic feet of gas per day would be exempt when the value of a barrel of oil or gas from those wells was $50 or lower. The measure states that the costs of the tax may not be passed on to consumers.