This measure imposes a 10 percent 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 “stripper” wells capable of producing less than ten barrels a day would be exempt if the price of oil from those wells is $50 a barrel or lower. The measure states that the costs of the tax may not be passed on to consumers and empowers a state agency to investigate attempts to “gouge” consumers.