AB 2756: Oil and gas operations: enforcement actions.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-09-09
(1)Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. Existing law provides that a person who violates certain requirements related to the regulation of oil and gas is subject to a civil penalty not to exceed $25,000 for each violation. Existing law requires the State Oil and Gas Supervisor to consider specified circumstances when establishing the amount of the civil penalty.
This bill would require the supervisor to consider specified additional circumstances when establishing the amount of the civil penalty. The bill would set ranges of civil penalty amounts depending on whether the violation is a well stimulation violation, a major violation, or a minor violation, as defined. The bill would authorize the supervisor, in his or her discretion, to treat each day a major or minor violation continues or is not cured as a separate violation. The bill would authorize the supervisor to allow a supplemental environmental project, as defined, in lieu of a portion of the civil penalty amount, not to exceed 50% of the civil penalty amount, as specified. The bill would, until January 1, 2021, require that the civil penalties assessed under these provisions be deposited in the Oil and Gas Environmental Remediation Account. The bill would, until January 1, 2021, establish that account in the Oil, Gas, and Geothermal Administrative Fund to be administered and managed by the division, and would require that the moneys in the account be used, upon appropriation by the Legislature, to plug and abandon oil and gas wells, decommission attendant facilities, or otherwise remediate sites that the supervisor determines could pose a danger to life, health, water quality, wildlife, or natural resources if there is no operator determined by the supervisor to be responsible for remediation or who is able to respond. The bill would authorize the division to adopt regulations to implement these provisions, and would repeal obsolete provisions related to the Acute Orphan Well Account.
(2)Existing law establishes procedures for an operator of a well or production facility to appeal to the Director of Conservation from an order of the supervisor or a district deputy. Existing law requires a notice of appeal to be filed with supervisor or with the district deputy who issued the order.
This bill would make numerous changes to the appeal process and procedures. The bill would, among other things, require the notice of appeal to be filed with the director, revise exceptions for when the notice of appeal operates as a stay of the order, revise what costs will be refunded if an emergency order is set aside or modified on appeal, and revise the circumstances in which appeals are to be heard in a formal hearing process before an administrative law judge, instead of in an informal hearing before the director.
This bill would make numerous changes to the process and procedures for an informal hearing before the director. The bill would, among other things, authorize the director to extend the date of the hearing for good cause upon his or her own motion, revise the authorization for the hearing to be electronically recorded by either party, revise the timeline in which the director is required to grant or deny a petition to order the testimony of a witness at the hearing, and provide that obtaining subpoenas may be considered good cause to extend the date of the hearing.
(3)Existing law sets forth numerous provisions governing discovery in the context of an informal hearing before the director. Existing law authorizes the supervisor or the director, upon application to a judge of the superior court of the county within which the proceeding or investigation is pending, to obtain a subpoena compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at such places as the judge may designate within the limits prescribed in these provisions.
This bill would make numerous changes to these discovery provisions. The bill would, among other things, require a judge of the superior court, upon application by the supervisor or director, to assign a case number for the proceeding or investigation, to issue an order prescribing the nature and scope of the proceeding or investigation, and to retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation; authorize the attorney of record for the supervisor or director, upon the assigning of a case number, to issue subpoenas compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts for certain pending proceedings or investigations in the manner specified; authorize the supervisor or director, or his or her inspector, to inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the certain requirements; authorize the supervisor or director to require any owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the supervisor or director require; and prohibit the division and the department from making available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status, or other confidential or privileged information, when requested by the owner or operator furnishing the report. Because the bill would expand the crime of perjury, it would impose a state-mandated local program.
(4)Existing law provides, if the operator does not appeal an order, seek judicial review of a decision affirming or modifying an order within the time provided in law, or if the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose constitutes a state tax lien against the real and personal property of the operator.
This bill additionally would include any civil penalties imposed by the supervisor for violations of certain requirements related to the regulation of oil and gas in these provisions. The bill would authorize the supervisor to apply to the appropriate superior court for a clerks judgment, in addition to the state tax lien, and would provide provisions related to obtaining the clerks judgment.
(5)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(1)Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. Existing law provides that a person who violates certain requirements related to the regulation of oil and gas is subject to a civil penalty not to exceed $25,000 for each violation. Existing law requires the State Oil and Gas Supervisor to consider specified circumstances when establishing the amount of the civil penalty.
This bill would require the supervisor to consider specified additional circumstances when establishing the amount of the civil penalty. The bill would set ranges of civil penalty amounts depending on whether the violation is a well stimulation violation, a major violation, or a minor violation, as defined. The bill would authorize the supervisor, in his or her discretion, to treat each day a major or minor violation continues or is not cured as a separate violation. The bill would authorize the supervisor to allow a supplemental environmental project, as defined, in lieu of a portion of the civil penalty amount, not to exceed 50% of the civil penalty amount, as specified. The bill would, until January 1, 2021, require that the civil penalties assessed under these provisions be deposited in the Oil and Gas Environmental Remediation Account. The bill would, until January 1, 2021, establish that account in the Oil, Gas, and Geothermal Administrative Fund to be administered and managed by the division, and would require that the moneys in the account be used, upon appropriation by the Legislature, to plug and abandon oil and gas wells, decommission attendant facilities, or otherwise remediate sites that the supervisor determines could pose a danger to life, health, water quality, wildlife, or natural resources if there is no operator determined by the supervisor to be responsible for remediation or who is able to respond. The bill would authorize the division to adopt regulations to implement these provisions, and would repeal obsolete provisions related to the Acute Orphan Well Account.
(2)Existing law establishes procedures for an operator of a well or production facility to appeal to the Director of Conservation from an order of the supervisor or a district deputy. Existing law requires a notice of appeal to be filed with supervisor or with the district deputy who issued the order.
This bill would make numerous changes to the appeal process and procedures. The bill would, among other things, require the notice of appeal to be filed with the director, revise exceptions for when the notice of appeal operates as a stay of the order, revise what costs will be refunded if an emergency order is set aside or modified on appeal, and revise the circumstances in which appeals are to be heard in a formal hearing process before an administrative law judge, instead of in an informal hearing before the director.
This bill would make numerous changes to the process and procedures for an informal hearing before the director. The bill would, among other things, authorize the director to extend the date of the hearing for good cause upon his or her own motion, revise the authorization for the hearing to be electronically recorded by either party, revise the timeline in which the director is required to grant or deny a petition to order the testimony of a witness at the hearing, and provide that obtaining subpoenas may be considered good cause to extend the date of the hearing.
(3)Existing law sets forth numerous provisions governing discovery in the context of an informal hearing before the director. Existing law authorizes the supervisor or the director, upon application to a judge of the superior court of the county within which the proceeding or investigation is pending, to obtain a subpoena compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at such places as the judge may designate within the limits prescribed in these provisions.
This bill would make numerous changes to these discovery provisions. The bill would, among other things, require a judge of the superior court, upon application by the supervisor or director, to assign a case number for the proceeding or investigation, to issue an order prescribing the nature and scope of the proceeding or investigation, and to retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation; authorize the attorney of record for the supervisor or director, upon the assigning of a case number, to issue subpoenas compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts for certain pending proceedings or investigations in the manner specified; authorize the supervisor or director, or his or her inspector, to inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the certain requirements; authorize the supervisor or director to require any owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the supervisor or director require; and prohibit the division and the department from making available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status, or other confidential or privileged information, when requested by the owner or operator furnishing the report. Because the bill would expand the crime of perjury, it would impose a state-mandated local program.
(4)Existing law provides, if the operator does not appeal an order, seek judicial review of a decision affirming or modifying an order within the time provided in law, or if the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose constitutes a state tax lien against the real and personal property of the operator.
This bill additionally would include any civil penalties imposed by the supervisor for violations of certain requirements related to the regulation of oil and gas in these provisions. The bill would authorize the supervisor to apply to the appropriate superior court for a clerks judgment, in addition to the state tax lien, and would provide provisions related to obtaining the clerks judgment.
(5)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(1)Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. Existing law provides that a person who violates certain requirements related to the regulation of oil and gas is subject to a civil penalty not to exceed $25,000 for each violation. Existing law requires the State Oil and Gas Supervisor to consider specified circumstances when establishing the amount of the civil penalty.
This bill would require the supervisor to consider specified additional circumstances when establishing the amount of the civil penalty. The bill would set ranges of civil penalty amounts depending on whether the violation is a well stimulation violation, a major violation, or a minor violation, as defined. The bill would authorize the supervisor, in his or her discretion, to treat each day a major or minor violation continues or is not cured as a separate violation. The bill would authorize the supervisor to allow a supplemental environmental project, as defined, in lieu of a portion of the civil penalty amount, not to exceed 50% of the civil penalty amount, as specified. The bill would would, until January 1, 2021, require that the civil penalties assessed under these provisions be deposited in the Oil and Gas Environmental Remediation Account. The bill would would, until January 1, 2021, establish that account in the Oil, Gas, and Geothermal Administrative Fund to be administered and managed by the division, and would require that the moneys in the account be used, upon appropriation by the Legislature, to plug and abandon oil and gas wells, decommission attendant facilities, or otherwise remediate sites that the supervisor determines could pose a danger to life, health, water quality, wildlife, or natural resources if there is no operator determined by the supervisor to be responsible for remediation or who is able to respond. The bill would authorize the division to adopt regulations to implement these provisions, and would repeal obsolete provisions related to the Acute Orphan Well Account.
(2)Existing law establishes procedures for an operator of a well or production facility to appeal to the Director of Conservation from an order of the supervisor or a district deputy. Existing law requires a notice of appeal to be filed with supervisor or with the district deputy who issued the order.
This bill would make numerous changes to the appeal process and procedures. The bill would, among other things, require the notice of appeal to be filed with the director, revise exceptions for when the notice of appeal operates as a stay of the order, revise what costs will be refunded if an emergency order is set aside or modified on appeal, and revise the circumstances in which appeals are to be heard in a formal hearing process before an administrative law judge, instead of in an informal hearing before the director.
This bill would make numerous changes to the process and procedures for an informal hearing before the director. The bill would, among other things, authorize the director to extend the date of the hearing for good cause upon his or her own motion, revise the authorization for the hearing to be electronically recorded by either party, revise the timeline in which the director is required to grant or deny a petition to order the testimony of a witness at the hearing, and provide that obtaining subpoenas may be considered good cause to extend the date of the hearing.
(3)Existing law sets forth numerous provisions governing discovery in the context of an informal hearing before the director. Existing law authorizes the supervisor or the director, upon application to a judge of the superior court of the county within which the proceeding or investigation is pending, to obtain a subpoena compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at such places as the judge may designate within the limits prescribed in these provisions.
This bill would make numerous changes to these discovery provisions. The bill would, among other things, require a judge of the superior court, upon application by the supervisor or director, to assign a case number for the proceeding or investigation, to issue an order prescribing the nature and scope of the proceeding or investigation, and to retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation; authorize the attorney of record for the supervisor or director, upon the assigning of a case number, to issue subpoenas compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts for certain pending proceeding or investigation in the manner specified; authorize the supervisor or director, or his or her inspector, to inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the certain requirements; authorize the supervisor or director to require any owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the supervisor or director require; and prohibit the division and the department from making available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status, or other confidential or privileged information, when requested by the owner or operator furnishing the report. Because the bill would expand the crime of perjury, it would impose a state-mandated local program.
(4)Existing law provides if the operator does not appeal an order, seek judicial review of a decision affirming or modifying an order within the time provided in law, or if the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose constitutes a state tax lien against the real and personal property of the operator.
This bill additionally would include any civil penalties imposed by the supervisor for violations of certain requirements related to the regulation of oil and gas in these provisions. The bill would authorize the supervisor to apply to the appropriate superior court for a clerks judgment, in addition to the state tax lien, and would provide provisions related to obtaining the clerks judgment.
(5)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(1)Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. Existing law provides that a person who violates certain requirements related to the regulation of oil and gas is subject to a civil penalty not to exceed $25,000 for each violation. Existing law requires the State Oil and Gas Supervisor to consider specified circumstances when establishing the amount of the civil penalty.
This bill instead would authorize require the supervisor to consider specified additional circumstances when establishing the amount of the civil penalty. The bill would set ranges of civil penalty amounts depending on whether the violation is a well stimulation violation, a major violation, or a minor violation, as defined. The bill would authorize the supervisor, in his or her discretion, to treat each day a major or minor violation continues or is not cured as a separate violation. The bill would authorize the supervisor to allow a supplemental environmental project, as defined, in lieu of a portion of the civil penalty amount, not to exceed 50% of the civil penalty amount, as specified. The bill would require that the civil penalties assessed under these provisions be deposited in the Oil and Gas Environmental Remediation Account. The bill would establish that account in the Oil, Gas, and Geothermal Administrative Fund to be administered and managed by the division, and would require that the moneys in the account be used, upon appropriation by the Legislature, to plug and abandon oil and gas wells, decommission attendant facilities, or otherwise remediate sites that the supervisor determines could pose a danger to life, health, water quality, wildlife, or natural resources if there is no operator determined by the supervisor to be responsible for plugging and abandoning the well remediation or who is able to respond. The bill would authorize the division to adopt regulations to implement these provisions, and would repeal obsolete provisions related to the Acute Orphan Well Account.
(2)Existing law establishes procedures for an operator of a well or production facility to appeal to the Director of Conservation from an order of the supervisor or a district deputy. Existing law requires a notice of appeal to be filed with supervisor or with the district deputy who issued the order.
This bill would make numerous changes to the appeal process and procedures. The bill would, among other things, require the notice of appeal to be filed with the director, revise exceptions for when the notice of appeal operates as a stay of the order, revise what costs will be refunded if an emergency order is set aside or modified on appeal, and revise the circumstances in which appeals are to be heard in a formal hearing process before an administrative law judge, instead of in an informal hearing before the director.
This bill would make numerous changes to the process and procedures for an informal hearing before the director. The bill would, among other things, authorize the director to extend the date of the hearing for good cause upon his or her own motion, remove revise the authorization for the hearing to be electronically recorded by either party, revise the timeline in which the director is required to grant or deny a petition to order the testimony of a witness at the hearing, and provide that obtaining subpoenas may be considered good cause to extend the date of the hearing.
(3)Existing law sets forth numerous provisions governing discovery in the context of an informal hearing before the director. Existing law authorizes the supervisor or the director, upon application to a judge of the superior court of the county within which the proceeding or investigation is pending, to obtain a subpoena compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at such places as the judge may designate within the limits prescribed in these provisions.
This bill would make numerous changes to these discovery provisions. The bill would, among other things, require a judge of the superior court, upon application by the supervisor or director, to assign a case number for the proceeding or investigation, to issue an order prescribing the nature and scope of the proceeding or investigation, and to retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation; authorize the attorney of record for the supervisor or director, upon the assigning of a case number, to issue subpoenas compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts for certain pending proceeding or investigation in the manner specified; authorize the supervisor or director, or his or her inspector, to inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the certain requirements; authorize the supervisor or director to require any owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the supervisor or director require; and prohibit the division and the department from making available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status, or other confidential or privileged information, when requested by the owner or operator furnishing the report. Because the bill would expand the crime of perjury, it would impose a state-mandated local program.
(4)Existing law provides if the operator does not appeal an order, seek judicial review of a decision affirming or modifying an order within the time provided in law, or if the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose constitutes a state tax lien against the real and personal property of the operator.
This bill additionally would include any civil penalties imposed by the supervisor for violations of certain requirements related to the regulation of oil and gas in these provisions. The bill would authorize the supervisor to apply to the appropriate superior court for a clerks judgment, in addition to the state tax lien, and would provide provisions related to obtaining the clerks judgment.
(5)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(1)Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. Existing law provides that a person who violates certain requirements related to the regulation of oil and gas is subject to a civil penalty not to exceed $25,000 for each violation. Existing law requires the State Oil and Gas Supervisor to consider specified circumstances when establishing the amount of the civil penalty.
This bill instead would authorize the supervisor to consider specified circumstances when establishing the amount of the civil penalty. The bill would authorize the supervisor, in his or her discretion, to treat each day a violation continues or is not cured as a separate violation. The bill would authorize the supervisor to allow a supplemental environmental project, as defined, in lieu of a portion of the civil penalty amount, not to exceed 50% of the civil penalty amount, as specified. The bill would require that the civil penalties assessed under these provisions be deposited in the Oil and Gas Environmental Remediation Account. The bill would establish that account in the Oil, Gas, and Geothermal Administrative Fund to be administered and managed by the division, and would require that the moneys in the account be used, upon appropriation by the Legislature, to plug and abandon oil and gas wells, decommission attendant facilities, or otherwise remediate sites that the supervisor determines could pose a danger to life, health, water quality, wildlife, or natural resources if there is no operator determined by the supervisor to be responsible for plugging and abandoning the well or who is able to respond. The bill would authorize the division to adopt regulations to implement these provisions, and would repeal obsolete provisions related to the Acute Orphan Well Account.
(2)Existing law establishes procedures for an operator of a well or production facility to appeal to the Director of Conservation from an order of the supervisor or a district deputy. Existing law requires a notice of appeal to be filed with supervisor or with the district deputy who issued the order.
This bill would make numerous changes to the appeal process and procedures. The bill would, among other things, require the notice of appeal to be filed with the director, revise exceptions for when the notice of appeal operates as a stay of the order, revise what costs will be refunded if an emergency order is set aside or modified on appeal, and revise the circumstances in which appeals are to be heard in a formal hearing process before an administrative law judge, instead of in an informal hearing before the director.
This bill would make numerous changes to the process and procedures for an informal hearing before the director. The bill would, among other things, authorize the director to extend the date of the hearing for good cause upon his or her own motion, remove the authorization for the hearing to be electronically recorded by either party, revise the timeline in which the director is required to grant or deny a petition to order the testimony of a witness at the hearing, and provide that obtaining subpoenas may be considered good cause to extend the date of the hearing.
(3)Existing law sets forth numerous provisions governing discovery in the context of an informal hearing before the director. Existing law authorizes the supervisor or the director, upon application to a judge of the superior court of the county within which the proceeding or investigation is pending, to obtain a subpoena compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at such places as the judge may designate within the limits prescribed in these provisions.
This bill would make numerous changes to these discovery provisions. The bill would, among other things, require a judge of the superior court, upon application by the supervisor or director, to assign a case number for the proceeding or investigation, to issue an order prescribing the nature and scope of the proceeding or investigation, and to retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation; authorize the attorney of record for the supervisor or director, upon the assigning of a case number, to issue subpoenas compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts for certain pending proceeding or investigation in the manner specified; authorize the supervisor or director, or his or her inspector, to inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the certain requirements; authorize the supervisor or director to require any owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the supervisor or director require; and prohibit the division and the department from making available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status, or other confidential or privileged information, when requested by the owner or operator furnishing the report. Because the bill would expand the crime of perjury, it would impose a state-mandated local program.
(4)Existing law provides if the operator does not appeal an order, seek judicial review of a decision affirming or modifying an order within the time provided in law, or if the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose constitutes a state tax lien against the real and personal property of the operator.
This bill additionally would include any civil penalties imposed by the supervisor for violations of certain requirements related to the regulation of oil and gas in these provisions. The bill would authorize the supervisor to apply to the appropriate superior court for a clerks judgment, in addition to the state tax lien, and would provide provisions related to obtaining the clerks judgment.
(5)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(1)Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, and abandonment of oil and gas wells in the state. Existing law provides that a person who violates certain requirements related to the regulation of oil and gas is subject to a civil penalty not to exceed $25,000 for each violation. Existing law requires the Oil and Gas Supervisor to consider specified circumstances when establishing the amount of the civil penalty.
This bill instead would authorize the supervisor to consider specified circumstances when establishing the amount of the civil penalty. The bill would authorize the supervisor, in his or her discretion, to treat each day a violation continues or is not cured as a separate violation. The bill would authorize the supervisor to allow a supplemental environmental project, as defined, in lieu of a portion of the civil penalty amount, not to exceed 50% of the civil penalty amount, as specified.
(2)Existing law establishes procedures for an operator of a well or production facility to appeal to the Director of Conservation from an order of the supervisor or a district deputy. Existing law requires a notice of appeal to be filed with supervisor or with the district deputy who issued the order.
This bill would make numerous changes to the appeal process and procedures. The bill would, among other things, require the notice of appeal to be filed with the director, revise exceptions for when the notice of appeal operates as a stay of the order, revise what costs will be refunded if an emergency order is set aside or modified on appeal, and revise the circumstances in which appeals are to be heard in a formal hearing process before an administrative law judge, instead of in an informal hearing before the director.
This bill would make numerous changes to the process and procedures for an informal hearing before the director. The bill would, among other things, authorize the director to extend the date of the hearing for good cause upon his or her own motion, remove the authorization for the hearing to be electronically recorded by either party, revise the timeline in which the director is required to grant or deny a petition to order the testimony of a witness at the hearing, and provide that obtaining subpoenas may be considered good cause to extend the date of the hearing.
(3)Existing law sets forth numerous provisions governing discovery in the context of an informal hearing before the director. Existing law authorizes the supervisor or the director, upon application to a judge of the superior court of the county within which the proceeding or investigation is pending, to obtain a subpoena compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at such places as the judge may designate within the limits prescribed in these provisions.
This bill would make numerous changes to these discovery provisions. The bill would, among other things, require a judge of the superior court, upon application by the supervisor or director, to assign a case number for the proceeding or investigation, to issue an order prescribing the nature and scope of the proceeding or investigation, and to retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation; authorize the attorney of record for the supervisor or director, upon the assigning of a case number, to issue subpoenas compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts for certain pending proceeding or investigation in the manner specified; authorize the supervisor or director, or his or her inspector, to inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the certain requirements; authorize the supervisor or director to require any owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the supervisor or director require; and prohibit the division and the department from making available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status, or other confidential or privileged information, when requested by the owner or operator furnishing the report. Because the bill would expand the crime of perjury, it would impose a state-mandated local program.
(4)Existing law provides if the operator does not appeal an order, seek judicial review of a decision affirming or modifying an order within the time provided in law, or if the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose constitutes a state tax lien against the real and personal property of the operator.
This bill additionally would include any civil penalties imposed by the supervisor for violations of certain requirements related to the regulation of oil and gas in these provisions. The bill would authorize the supervisor to apply to the appropriate superior court for a clerks judgment, in addition to the state tax lien, and would provide provisions related to obtaining the clerks judgment.
(5)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(a)A person who violates this chapter or a regulation implementing this chapter is, at the supervisors discretion, subject to a civil penalty as described in subdivision (b) for each violation. An act of God and an act of vandalism beyond the reasonable control of the operator shall not be considered a violation. The civil penalty shall be imposed by an order of the supervisor pursuant to Section 3225 upon a determination that a violation has been committed by the person charged. The imposition of a civil penalty under this section shall be in addition to any other penalty provided by law for the violation. When establishing the amount of the civil penalty pursuant to this section, the supervisor shall consider, in addition to other relevant circumstances, all of the following:
(1)The extent of harm caused by the violation.
(2)The persistence of the violation.
(3)The pervasiveness of the violation.
(4)The number of prior violations by the same violator.
(5)The degree of culpability of the violator.
(6)Any economic benefit to the violator resulting from the violation.
(7)The violators ability to pay the civil penalty amount, as determined based on information publicly available to the division.
(8)The supervisors prosecution costs.
(b)(1)(A)A well stimulation violation is a violation of Article 3 (commencing with Section 3150) or the regulations implementing that article.
(B)The civil penalty amount for a well stimulation violation shall be not less than ten thousand dollars ($10,000) per day per violation and not more than twenty-five thousand dollars ($25,000) per day per violation.
(2)(A)A major violation is a violation that is not a well stimulation violation and that is one or more of the following:
(i)A violation that results in harm to persons or property or presents a significant threat to human health or the environment.
(ii)A knowing, willful, or intentional violation.
(iii)A chronic violation or one that is committed by a recalcitrant violator. In determining whether a violation is chronic or a violator is recalcitrant, the supervisor shall consider whether there is evidence indicating that the violator has engaged in a pattern of neglect or disregard with respect to applicable requirements.
(iv)A violation where the violator derived significant economic benefit, either by significantly reduced costs or a significant competitive advantage.
(B)The civil penalty amount for a major violation shall be not less than two thousand five hundred dollars ($2,500) per violation and not more than twenty-five thousand dollars ($25,000) per violation.
(3)(A)A minor violation is a violation that is neither a well stimulation violation nor a major violation.
(B) The civil penalty amount for a minor violation shall be not more than two thousand five hundred dollars ($2,500) per violation.
(4)At the supervisors discretion, each day a major or minor violation continues or is not cured may be treated as a separate violation.
(c)An order of the supervisor imposing a civil penalty shall be reviewable pursuant to Article 6 (commencing with Section 3350). When the order of the supervisor has become final and the penalty has not been paid, the supervisor may apply to the appropriate superior court for an order directing payment of the civil penalty. The supervisor may also seek from the court an order directing that production from the well or use of the production facility that is the subject of the civil penalty order be discontinued until the violation has been remedied to the satisfaction of the supervisor and the civil penalty has been paid.
(d)The supervisor may allow a supplemental environmental project in lieu of a portion of the civil penalty amount. The supplemental environmental project may not be more than 50 percent of the total civil penalty amount. Any amount collected under this section that is not allocated for a supplemental environmental project shall be deposited in the Oil and Gas Environmental Remediation Account established pursuant to Section 3261, until January 1, 2021. Commencing January 1, 2021, any amount collected under this section that is not allocated for a supplemental environmental project shall be deposited into the Oil, Gas, and Geothermal Administrative Fund.
(e)Supplemental environmental project means an environmentally beneficial project that a person, subject to an order of the supervisor imposing a civil penalty, voluntarily agrees to undertake in settlement of the action and to offset a portion of a civil penalty.
SEC. 2.Article 4.3 (commencing with Section 3260) of Chapter 1 of Division 3 of the Public Resources Code is repealed.SEC. 3.Article 4.3 (commencing with Section 3260) is added to Chapter 1 of Division 3 of the Public Resources Code, to read:4.3.Oil and Gas Environmental Remediation Account3260.For purposes of this article, account means the Oil and Gas Environmental Remediation Account established under Section 3261.
3261.(a)Notwithstanding any other provision of this chapter, including the expenditure limitations of Section 3258, the division shall administer and manage the Oil and Gas Environmental Remediation Account, which is hereby established in the Oil, Gas, and Geothermal Administrative Fund.
(b)Moneys in the account shall be used, upon appropriation by the Legislature, to plug and abandon oil and gas wells, decommission attendant facilities, or otherwise remediate sites that the supervisor determines could pose a danger to life, health, water quality, wildlife, or natural resources if there is no operator determined by the supervisor to be responsible for remediation pursuant to subdivision (c) of Section 3237 or who is able to respond.
3262.The division may adopt regulations to implement this article.
3263.This article shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 4.Section 3350 of the Public Resources Code is amended to read:3350.(a)The operator of a well or a production facility to whom the supervisor or district deputy has issued an order pursuant to this chapter may file a notice of appeal from that order. The notice of appeal shall be in writing and shall be filed with the director. The operator shall file the appeal within 10 days of the service of the order, or within 10 days of the posting of a copy of an order made pursuant to Section 3308. Failure of the operator to file an appeal from the order within the 10-day period shall be a waiver by the operator of its rights to challenge the order. If the order, other than an order made pursuant to Section 3308, is served by mail, the time for responding shall be determined as provided in Section 1013 of the Code of Civil Procedure.
(b)(1)The filing of a written notice of appeal shall operate as a stay of the order, except when an order is issued as an emergency order pursuant to Section 3226. If the order is an emergency order, the operator shall immediately perform whatever work is required by the order to alleviate the emergency or shall permit the agents appointed by the supervisor to perform that work. If the order is an emergency order to cease injection, then the operator shall cease injection as soon as it is safe to do so.
(2)If an emergency order is set aside or modified on appeal, the supervisor shall refund the reasonable costs incurred by the operator for whatever work is not required by the set-aside or modified order or shall not impose costs for work performed by the supervisor or the supervisors agents if the work is excluded from the modified order or the order is set aside. Only the costs of work performed shall be refunded, and there shall be no reimbursement for lost profits or increased production costs.
(3)(A) The costs to be refunded pursuant to paragraph (2) by the supervisor shall be determined in a hearing before the director after the exhaustion of appeals. The operator shall have the burden of proving the amount of costs to be refunded.
(B)A determination by the director as to the amount of costs to be refunded pursuant to paragraph (2) may be appealed by the operator pursuant to subdivision (a) of Section 3354.
(4)If the operator believes that it will be irretrievably injured by the performance of the work required to alleviate the emergency pending the outcome of the appeal, the operator may seek an order from the appropriate superior court restraining the enforcement of the order pending the outcome of the appeal.
SEC. 5.Section 3351 of the Public Resources Code is amended to read:3351.(a)A hearing shall be provided in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code only in an appeal from an order in the following circumstances:
(1)Issued pursuant to a Section 3237 finding that the operators wells are deserted and should be plugged and abandoned.
(2)Imposing civil penalties totaling more than twenty-five thousand dollars ($25,000).
(3)Rescinding an entire injection project approval for a project that has already commenced.
(4)Imposing a life-of-well bond or a life-of-production facility bond.
(b)An order issued pursuant to Section 3225 shall satisfy the substantive requirements of an accusation pursuant to Section 11503 of the Government Code and may be filed when scheduling a formal hearing in accordance with this chapter and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. All applicable formal hearing deadlines do not commence until a formal hearing is scheduled. When scheduling a formal hearing after an appeal from an order under this chapter, the supervisor is not required to send a Notice of Defense statement and the operator is not required to request a hearing.
(c)For an appeal of an order that is not described in subdivision (a), a hearing shall be conducted by the director in accordance with Sections 3352 and 3353.
(d)For an appeal of an order that is described in subdivision (a) and is also an emergency order, a hearing shall be conducted by the director in accordance with Sections 3352 and 3353 for the limited purpose of considering the reasonableness of the supervisors determination that an emergency exists. All other penalties and requirements imposed by the order shall be considered at a hearing provided in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
SEC. 6.Section 3352 of the Public Resources Code is amended to read:3352.(a)A hearing conducted by the director shall adhere to the following:
(1)When an order is not issued as an emergency order, within 30 days from the date of the service of the notice of appeal, the director shall provide to the operator notice of the time and place of the hearing. The hearing shall take place within 30 days after the date of the directors notice. The notice shall inform the operator that the director may extend the date of the hearing for up to 60 days for good cause upon his or her own motion, or an application of the operator or the supervisor.
(2)When an order has been issued as an emergency order, within 10 days from the date of the service of the notice of appeal, the director shall provide to the operator notice of the time and place of the hearing. The hearing shall take place within 20 days after the date of the directors notice. The notice shall inform the operator that the director may extend the date of the hearing for up to 30 days for good cause upon his or her own motion, or an application of the operator or the supervisor.
(b)The director shall conduct the hearing within the district where the majority of the wells or production facilities that are the subject of the order are located, or the hearing may be conducted at a location outside of that district upon application of the operator. The hearing shall be reported by a stenographic reporter.
(c)The notice of hearing shall inform the operator of its right to file a written answer to the charges no later than 10 days before the date of the hearing. The notice also shall inform the operator that it has the right to present oral and documentary evidence at the hearing.
(d)Upon a verified and timely petition of the operator, the director may order the testimony of a witness at the hearing. The petition shall be served upon the director and the other party within five days after the filing of an appeal and shall set forth the name and address of the witness whose testimony is requested, to the extent known; a showing of the materiality of the testimony; and a showing that the witness cannot be compelled to testify absent an order of the director. The supervisor may file an opposition to the petition within five days after the petition is served. The director shall either deny or grant the petition within 10 days after receipt of the petition. Upon granting a petition, the director shall issue a subpoena pursuant to Section 3357 compelling the testimony of the witness at the hearing. Obtaining subpoenas may be considered good cause to extend the date of the hearing under paragraph (1) or (2) of subdivision (a).
(e)The director may convert a hearing pursuant to this section to a formal hearing conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code in any of the following circumstances:
(1)The operator makes a showing satisfactory to the director that the order being appealed is likely to result in termination of an established oil or gas producing or injection operation.
(2)It appears to the director that the hearing will involve complex evidentiary or procedural issues that will cause more than minimal delay or burdens.
(3)The operator and the supervisor agree and stipulate to convert the hearing to a formal hearing.
(f)The conversion of a hearing pursuant to this section to a formal hearing shall be conducted in accordance with Article 15 (commencing with Section 11470.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code. If a hearing for an appeal of an emergency order is converted to a formal hearing, the supervisor shall endeavor to schedule and notice a formal emergency hearing as soon as reasonably possible and, notwithstanding Section 11517 of the Government Code, the director shall only have 30 days from receipt of the administrative law judges proposed emergency hearing decision to act as prescribed in subparagraphs (A) to (E), inclusive, of paragraph (2) of subdivision (c) of Section 11517 of the Government Code.
(g)The director or his or her designee shall permit inconspicuous personal recording devices to be used by persons during a hearing pursuant to this section to make sound recordings as personal notes of the proceedings. A person proposing to use a recording device shall provide advance notice to the director or his or her designee. The recordings may not be used for any purpose other than as personal notes.
SEC. 7.Section 3356 of the Public Resources Code is amended to read:3356.(a)If the operator does not appeal an order, if the operator does not timely seek judicial review of a decision affirming or modifying an order within the time provided in Section 3354, or if the operator has timely sought and obtained judicial review and the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose on the operator for work performed by the supervisor or the supervisors agents, and any civil penalties imposed under Section 3236.5 shall constitute a state tax lien against the real and personal property of the operator pursuant to Section 3423.
(b)In addition to a state tax lien, the supervisor may apply to the appropriate superior court for a clerks judgment. The application, which shall include a certified copy of the final agency order or decision, shall constitute a sufficient showing to warrant the issuance of the judgment. The court clerk shall enter the judgment immediately in conformity with the application. The judgment so entered shall have the same force and effect as, and shall be subject to all the provisions of law relating to, a judgment in a civil action, and may be enforced in the same manner as any other judgment of the court.
SEC. 8.Section 3357 of the Public Resources Code is amended to read:3357.(a)In any proceeding before the director, and in any proceeding instituted by the supervisor for the purpose of enforcing or carrying out the provisions of this division, or for the purpose of holding an investigation to ascertain the condition of any well or wells complained of, or which in the opinion of the supervisor may reasonably be presumed to be improperly located, drilled, operated, maintained, or conducted, the supervisor and the director shall have the power to administer oaths and may apply to a judge of the superior court of the county in which the proceeding or investigation is pending for subpoenas for witnesses to attend the proceeding or investigation. Upon the application of the supervisor or the director, the judge of the superior court shall assign a case number for the proceeding or investigation, shall issue an order prescribing the nature and scope of the proceeding or investigation, and shall retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation. Upon the assigning of a case number, the attorney of record for the supervisor or director may issue subpoenas directing witnesses to attend the proceeding or investigation, and those persons shall be required to produce, when directed, all records, surveys, documents, books, or accounts in the witness custody or under the witness control; except that no person shall be required to attend upon the proceeding unless the person resides within the same county or within 100 miles of the place of attendance. The attorney of record for the supervisor or the director may in that case cause the depositions of witnesses residing within or without the state to be taken in the manner prescribed by law for like depositions in civil actions in superior courts of this state under Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure, and may issue subpoenas compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at designated places within the limits prescribed in this section.
(b)(1)In conducting a proceeding or investigation specified in subdivision (a), the supervisor or director may require an owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the supervisor or director requires. The burden, including costs, of any report shall bear a reasonable relationship to the need for the report and the benefits to be obtained from the report. In requiring a report, the supervisor or director shall explain in writing to the owner or operator the need for the report, and shall identify the rationale that supports requiring that owner or operator to provide the report.
(2)When requested by the owner or operator furnishing the report, neither the division nor the department shall make available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status pursuant to Section 3234, or other confidential or privileged information. The division or department shall make that confidential or privileged information available to other public agencies as needed for regulatory purposes and in accordance with a written agreement with the other public agency regarding the sharing of the information.
(c)In conducting a proceeding or investigation pursuant to subdivision (a), the supervisor or director, or his or her inspector, may inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the requirements of or authorized by this division. The inspection shall be made with the consent of the owner or operator or, if consent is withheld, with a warrant duly issued pursuant to the procedure set forth in Title 13 (commencing with Section 1822.50) of Part 3 of the Code of Civil Procedure. In the event of an emergency affecting the public health or safety, an inspection may be performed without consent or a warrant. This subdivision is in addition to any other inspection authority granted or authorized by this division.
SEC. 9.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)A person who violates this chapter or a regulation implementing this chapter is, at the supervisors discretion, subject to a civil penalty as described in subdivision (b) for each violation. An act of God and an act of vandalism beyond the reasonable control of the operator shall not be considered a violation. The civil penalty shall be imposed by an order of the supervisor pursuant to Section 3225 upon a determination that a violation has been committed by the person charged. The imposition of a civil penalty under this section shall be in addition to any other penalty provided by law for the violation. When establishing the amount of the civil penalty pursuant to this section, the supervisor shall consider, in addition to other relevant circumstances, all of the following:
(1)The extent of harm caused by the violation.
(2)The persistence of the violation.
(3)The pervasiveness of the violation.
(4)The number of prior violations by the same violator.
(5)The degree of culpability of the violator.
(6)Any economic benefit to the violator resulting from the violation.
(7)The violators ability to pay the civil penalty amount, as determined based on information publicly available to the division.
(8)The supervisors prosecution costs.
(b)(1)(A)A well stimulation violation is a violation of Article 3 (commencing with Section 3150) or the regulations implementing that article.
(B)The civil penalty amount for a well stimulation violation shall be not less than ten thousand dollars ($10,000) per day per violation and not more than twenty-five thousand dollars ($25,000) per day per violation.
(2)(A)A major violation is a violation that is not a well stimulation violation and that is one or more of the following:
(i)A violation that results in harm to persons or property or presents a significant threat to human health or the environment.
(ii)A knowing, willful, or intentional violation.
(iii)A chronic violation or one that is committed by a recalcitrant violator. In determining whether a violation is chronic or a violator is recalcitrant, the supervisor shall consider whether there is evidence indicating that the violator has engaged in a pattern of neglect or disregard with respect to applicable requirements.
(iv)A violation where the violator derived significant economic benefit, either by significantly reduced costs or a significant competitive advantage.
(B)The civil penalty amount for a major violation shall be not less than two thousand five hundred dollars ($2,500) per violation and not more than twenty-five thousand dollars ($25,000) per violation.
(3)(A)A minor violation is a violation that is neither a well stimulation violation nor a major violation.
(B) The civil penalty amount for a minor violation shall be not more than two thousand five hundred dollars ($2,500) per violation.
(4)At the supervisors discretion, each day a major or minor violation continues or is not cured may be treated as a separate violation.
(c)An order of the supervisor imposing a civil penalty shall be reviewable pursuant to Article 6 (commencing with Section 3350). When the order of the supervisor has become final and the penalty has not been paid, the supervisor may apply to the appropriate superior court for an order directing payment of the civil penalty. The supervisor may also seek from the court an order directing that production from the well or use of the production facility that is the subject of the civil penalty order be discontinued until the violation has been remedied to the satisfaction of the supervisor and the civil penalty has been paid.
(d)The supervisor may allow a supplemental environmental project in lieu of a portion of the civil penalty amount. The supplemental environmental project may not be more than 50 percent of the total civil penalty amount. Any amount collected under this section that is not allocated for a supplemental environmental project shall be deposited in the Oil and Gas Environmental Remediation Account established pursuant to Section 3261, until January 1, 2021. Commencing January 1, 2021, any amount collected under this section that is not allocated for a supplemental environmental project shall be deposited into the Oil, Gas, and Geothermal Administrative Fund.
(e)Supplemental environmental project means an environmentally beneficial project that a person, subject to an order of the supervisor imposing a civil penalty, voluntarily agrees to undertake in settlement of the action and to offset a portion of a civil penalty.
SEC. 2.Article 4.3 (commencing with Section 3260) of Chapter 1 of Division 3 of the Public Resources Code is repealed.SEC. 3.Article 4.3 (commencing with Section 3260) is added to Chapter 1 of Division 3 of the Public Resources Code, to read:4.3.Oil and Gas Environmental Remediation Account3260.For purposes of this article, account means the Oil and Gas Environmental Remediation Account established under Section 3261.
3261.(a)Notwithstanding any other provision of this chapter, including the expenditure limitations of Section 3258, the division shall administer and manage the Oil and Gas Environmental Remediation Account, which is hereby established in the Oil, Gas, and Geothermal Administrative Fund.
(b)Moneys in the account shall be used, upon appropriation by the Legislature, to plug and abandon oil and gas wells, decommission attendant facilities, or otherwise remediate sites that the supervisor determines could pose a danger to life, health, water quality, wildlife, or natural resources if there is no operator determined by the supervisor to be responsible for remediation pursuant to subdivision (c) of Section 3237 or who is able to respond.
3262.The division may adopt regulations to implement this article.
3263.This article shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 4.Section 3350 of the Public Resources Code is amended to read:3350.(a)The operator of a well or a production facility to whom the supervisor or district deputy has issued an order pursuant to this chapter may file a notice of appeal from that order. The notice of appeal shall be in writing and shall be filed with the director. The operator shall file the appeal within 10 days of the service of the order, or within 10 days of the posting of a copy of an order made pursuant to Section 3308. Failure of the operator to file an appeal from the order within the 10-day period shall be a waiver by the operator of its rights to challenge the order. If the order, other than an order made pursuant to Section 3308, is served by mail, the time for responding shall be determined as provided in Section 1013 of the Code of Civil Procedure.
(b)(1)The filing of a written notice of appeal shall operate as a stay of the order, except when an order is issued as an emergency order pursuant to Section 3226. If the order is an emergency order, the operator shall immediately perform whatever work is required by the order to alleviate the emergency or shall permit the agents appointed by the supervisor to perform that work. If the order is an emergency order to cease injection, then the operator shall cease injection as soon as it is safe to do so.
(2)If an emergency order is set aside or modified on appeal, the supervisor shall refund the reasonable costs incurred by the operator for whatever work is not required by the set-aside or modified order or shall not impose costs for work performed by the supervisor or the supervisors agents if the work is excluded from the modified order or the order is set aside. Only the costs of work performed shall be refunded, and there shall be no reimbursement for lost profits or increased production costs.
(3)(A) The costs to be refunded pursuant to paragraph (2) by the supervisor shall be determined in a hearing before the director after the exhaustion of appeals. The operator shall have the burden of proving the amount of costs to be refunded.
(B)A determination by the director as to the amount of costs to be refunded pursuant to paragraph (2) may be appealed by the operator pursuant to subdivision (a) of Section 3354.
(4)If the operator believes that it will be irretrievably injured by the performance of the work required to alleviate the emergency pending the outcome of the appeal, the operator may seek an order from the appropriate superior court restraining the enforcement of the order pending the outcome of the appeal.
SEC. 5.Section 3351 of the Public Resources Code is amended to read:3351.(a)A hearing shall be provided in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code only in an appeal from an order in the following circumstances:
(1)Issued pursuant to a Section 3237 finding that the operators wells are deserted and should be plugged and abandoned.
(2)Imposing civil penalties totaling more than twenty-five thousand dollars ($25,000).
(3)Rescinding an entire injection project approval for a project that has already commenced.
(4)Imposing a life-of-well bond or a life-of-production facility bond.
(b)An order issued pursuant to Section 3225 shall satisfy the substantive requirements of an accusation pursuant to Section 11503 of the Government Code and may be filed when scheduling a formal hearing in accordance with this chapter and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. All applicable formal hearing deadlines do not commence until a formal hearing is scheduled. When scheduling a formal hearing after an appeal from an order under this chapter, the supervisor is not required to send a Notice of Defense statement and the operator is not required to request a hearing.
(c)For an appeal of an order that is not described in subdivision (a), a hearing shall be conducted by the director in accordance with Sections 3352 and 3353.
(d)For an appeal of an order that is described in subdivision (a) and is also an emergency order, a hearing shall be conducted by the director in accordance with Sections 3352 and 3353 for the limited purpose of considering the reasonableness of the supervisors determination that an emergency exists. All other penalties and requirements imposed by the order shall be considered at a hearing provided in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
SEC. 6.Section 3352 of the Public Resources Code is amended to read:3352.(a)A hearing conducted by the director shall adhere to the following:
(1)When an order is not issued as an emergency order, within 30 days from the date of the service of the notice of appeal, the director shall provide to the operator notice of the time and place of the hearing. The hearing shall take place within 30 days after the date of the directors notice. The notice shall inform the operator that the director may extend the date of the hearing for up to 60 days for good cause upon his or her own motion, or an application of the operator or the supervisor.
(2)When an order has been issued as an emergency order, within 10 days from the date of the service of the notice of appeal, the director shall provide to the operator notice of the time and place of the hearing. The hearing shall take place within 20 days after the date of the directors notice. The notice shall inform the operator that the director may extend the date of the hearing for up to 30 days for good cause upon his or her own motion, or an application of the operator or the supervisor.
(b)The director shall conduct the hearing within the district where the majority of the wells or production facilities that are the subject of the order are located, or the hearing may be conducted at a location outside of that district upon application of the operator. The hearing shall be reported by a stenographic reporter.
(c)The notice of hearing shall inform the operator of its right to file a written answer to the charges no later than 10 days before the date of the hearing. The notice also shall inform the operator that it has the right to present oral and documentary evidence at the hearing.
(d)Upon a verified and timely petition of the operator, the director may order the testimony of a witness at the hearing. The petition shall be served upon the director and the other party within five days after the filing of an appeal and shall set forth the name and address of the witness whose testimony is requested, to the extent known; a showing of the materiality of the testimony; and a showing that the witness cannot be compelled to testify absent an order of the director. The supervisor may file an opposition to the petition within five days after the petition is served. The director shall either deny or grant the petition within 10 days after receipt of the petition. Upon granting a petition, the director shall issue a subpoena pursuant to Section 3357 compelling the testimony of the witness at the hearing. Obtaining subpoenas may be considered good cause to extend the date of the hearing under paragraph (1) or (2) of subdivision (a).
(e)The director may convert a hearing pursuant to this section to a formal hearing conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code in any of the following circumstances:
(1)The operator makes a showing satisfactory to the director that the order being appealed is likely to result in termination of an established oil or gas producing or injection operation.
(2)It appears to the director that the hearing will involve complex evidentiary or procedural issues that will cause more than minimal delay or burdens.
(3)The operator and the supervisor agree and stipulate to convert the hearing to a formal hearing.
(f)The conversion of a hearing pursuant to this section to a formal hearing shall be conducted in accordance with Article 15 (commencing with Section 11470.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code. If a hearing for an appeal of an emergency order is converted to a formal hearing, the supervisor shall endeavor to schedule and notice a formal emergency hearing as soon as reasonably possible and, notwithstanding Section 11517 of the Government Code, the director shall only have 30 days from receipt of the administrative law judges proposed emergency hearing decision to act as prescribed in subparagraphs (A) to (E), inclusive, of paragraph (2) of subdivision (c) of Section 11517 of the Government Code.
(g)The director or his or her designee shall permit inconspicuous personal recording devices to be used by persons during a hearing pursuant to this section to make sound recordings as personal notes of the proceedings. A person proposing to use a recording device shall provide advance notice to the director or his or her designee. The recordings may not be used for any purpose other than as personal notes.
SEC. 7.Section 3356 of the Public Resources Code is amended to read:3356.(a)If the operator does not appeal an order, if the operator does not timely seek judicial review of a decision affirming or modifying an order within the time provided in Section 3354, or if the operator has timely sought and obtained judicial review and the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose on the operator for work performed by the supervisor or the supervisors agents, and any civil penalties imposed under Section 3236.5 shall constitute a state tax lien against the real and personal property of the operator pursuant to Section 3423.
(b)In addition to a state tax lien, the supervisor may apply to the appropriate superior court for a clerks judgment. The application, which shall include a certified copy of the final agency order or decision, shall constitute a sufficient showing to warrant the issuance of the judgment. The court clerk shall enter the judgment immediately in conformity with the application. The judgment so entered shall have the same force and effect as, and shall be subject to all the provisions of law relating to, a judgment in a civil action, and may be enforced in the same manner as any other judgment of the court.
SEC. 8.Section 3357 of the Public Resources Code is amended to read:3357.(a)In any proceeding before the director, and in any proceeding instituted by the supervisor for the purpose of enforcing or carrying out the provisions of this division, or for the purpose of holding an investigation to ascertain the condition of any well or wells complained of, or which in the opinion of the supervisor may reasonably be presumed to be improperly located, drilled, operated, maintained, or conducted, the supervisor and the director shall have the power to administer oaths and may apply to a judge of the superior court of the county in which the proceeding or investigation is pending for subpoenas for witnesses to attend the proceeding or investigation. Upon the application of the supervisor or the director, the judge of the superior court shall assign a case number for the proceeding or investigation, shall issue an order prescribing the nature and scope of the proceeding or investigation, and shall retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation. Upon the assigning of a case number, the attorney of record for the supervisor or director may issue subpoenas directing witnesses to attend the proceeding or investigation, and those persons shall be required to produce, when directed, all records, surveys, documents, books, or accounts in the witness custody or under the witness control; except that no person shall be required to attend upon the proceeding unless the person resides within the same county or within 100 miles of the place of attendance. The attorney of record for the supervisor or the director may in that case cause the depositions of witnesses residing within or without the state to be taken in the manner prescribed by law for like depositions in civil actions in superior courts of this state under Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure, and may issue subpoenas compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at designated places within the limits prescribed in this section.
(b)(1)In conducting a proceeding or investigation specified in subdivision (a), the supervisor or director may require an owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the supervisor or director requires. The burden, including costs, of any report shall bear a reasonable relationship to the need for the report and the benefits to be obtained from the report. In requiring a report, the supervisor or director shall explain in writing to the owner or operator the need for the report, and shall identify the rationale that supports requiring that owner or operator to provide the report.
(2)When requested by the owner or operator furnishing the report, neither the division nor the department shall make available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status pursuant to Section 3234, or other confidential or privileged information. The division or department shall make that confidential or privileged information available to other public agencies as needed for regulatory purposes and in accordance with a written agreement with the other public agency regarding the sharing of the information.
(c)In conducting a proceeding or investigation pursuant to subdivision (a), the supervisor or director, or his or her inspector, may inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the requirements of or authorized by this division. The inspection shall be made with the consent of the owner or operator or, if consent is withheld, with a warrant duly issued pursuant to the procedure set forth in Title 13 (commencing with Section 1822.50) of Part 3 of the Code of Civil Procedure. In the event of an emergency affecting the public health or safety, an inspection may be performed without consent or a warrant. This subdivision is in addition to any other inspection authority granted or authorized by this division.
SEC. 9.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)A person who violates this chapter or a regulation implementing this chapter is, at the supervisors discretion, subject to a civil penalty as described in subdivision (b) for each violation. An act of God and an act of vandalism beyond the reasonable control of the operator shall not be considered a violation. The civil penalty shall be imposed by an order of the supervisor pursuant to Section 3225 upon a determination that a violation has been committed by the person charged. The imposition of a civil penalty under this section shall be in addition to any other penalty provided by law for the violation. When establishing the amount of the civil penalty pursuant to this section, the supervisor shall consider, in addition to other relevant circumstances, all of the following:
(1)The extent of harm caused by the violation.
(2)The persistence of the violation.
(3)The pervasiveness of the violation.
(4)The number of prior violations by the same violator.
(5)The degree of culpability of the violator.
(6)Any economic benefit to the violator resulting from the violation.
(7)The violators ability to pay the civil penalty amount, as determined based on information publicly available to the division.
(8)The supervisors prosecution costs.
(b)(1)(A)A well stimulation violation is a violation of Article 3 (commencing with Section 3150) or the regulations implementing that article.
(B)The civil penalty amount for a well stimulation violation shall be not less than ten thousand dollars ($10,000) per day per violation and not more than twenty-five thousand dollars ($25,000) per day per violation.
(2)(A)A major violation is a violation that is not a well stimulation violation and that is one or more of the following:
(i)A violation that results in harm to persons or property or presents a significant threat to human health or the environment.
(ii)A knowing, willful, or intentional violation.
(iii)A chronic violation or one that is committed by a recalcitrant violator. In determining whether a violation is chronic or a violator is recalcitrant, the supervisor shall consider whether there is evidence indicating that the violator has engaged in a pattern of neglect or disregard with respect to applicable requirements.
(iv)A violation where the violator derived significant economic benefit, either by significantly reduced costs or a significant competitive advantage.
(B)The civil penalty amount for a major violation shall be not less than two thousand five hundred dollars ($2,500) per violation and not more than twenty-five thousand dollars ($25,000) per violation.
(3)(A)A minor violation is a violation that is neither a well stimulation violation nor a major violation.
(B) The civil penalty amount for a minor violation shall be not more than five two thousand five hundred dollars ($5,000) ($2,500) per violation.
(4)At the supervisors discretion, each day a major or minor violation continues or is not cured may be treated as a separate violation.
(c)An order of the supervisor imposing a civil penalty shall be reviewable pursuant to Article 6 (commencing with Section 3350). When the order of the supervisor has become final and the penalty has not been paid, the supervisor may apply to the appropriate superior court for an order directing payment of the civil penalty. The supervisor may also seek from the court an order directing that production from the well or use of the production facility that is the subject of the civil penalty order be discontinued until the violation has been remedied to the satisfaction of the supervisor and the civil penalty has been paid.
(d)The supervisor may allow a supplemental environmental project in lieu of a portion of the civil penalty amount. The supplemental environmental project may not be more than 50 percent of the total civil penalty amount. Any amount collected under this section that is not allocated for a supplemental environmental project shall be deposited in the Oil and Gas Environmental Remediation Account established pursuant to Section 3261. 3261, until January 1, 2021. Commencing January 1, 2021, any amount collected under this section that is not allocated for a supplemental environmental project shall be deposited into the Oil, Gas, and Geothermal Administrative Fund.
(e)Supplemental environmental project means an environmentally beneficial project that a person, subject to an order of the supervisor imposing a civil penalty, voluntarily agrees to undertake in settlement of the action and to offset a portion of a civil penalty.
SEC. 2.Article 4.3 (commencing with Section 3260) of Chapter 1 of Division 3 of the Public Resources Code is repealed.SEC. 3.Article 4.3 (commencing with Section 3260) is added to Chapter 1 of Division 3 of the Public Resources Code, to read:4.3.Oil and Gas Environmental Remediation Account3260.For purposes of this article, account means the Oil and Gas Environmental Remediation Account established under Section 3261.
3261.(a)Notwithstanding any other provision of this chapter, including the expenditure limitations of Section 3258, the division shall administer and manage the Oil and Gas Environmental Remediation Account, which is hereby established in the Oil, Gas, and Geothermal Administrative Fund.
(b)Moneys in the account shall be used, upon appropriation by the Legislature, to plug and abandon oil and gas wells, decommission attendant facilities, or otherwise remediate sites that the supervisor determines could pose a danger to life, health, water quality, wildlife, or natural resources if there is no operator determined by the supervisor to be responsible for remediation pursuant to subdivision (c) of Section 3237 or who is able to respond.
3262.The division may adopt regulations to implement this article.
3263.This article shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date.
SEC. 4.Section 3350 of the Public Resources Code is amended to read:3350.(a)The operator of a well or a production facility to whom the supervisor or district deputy has issued an order pursuant to this chapter may file a notice of appeal from that order. The notice of appeal shall be in writing and shall be filed with the director. The operator shall file the appeal within 10 days of the service of the order, or within 10 days of the posting of a copy of an order made pursuant to Section 3308. Failure of the operator to file an appeal from the order within the 10-day period shall be a waiver by the operator of its rights to challenge the order. If the order, other than an order made pursuant to Section 3308, is served by mail, the time for responding shall be determined as provided in Section 1013 of the Code of Civil Procedure.
(b)(1)The filing of a written notice of appeal shall operate as a stay of the order, except when an order for testing or remedial work or an order to cease and desist production facility operations is issued as an emergency order pursuant to Section 3226, or when the order is to cease injection operations. If the order is an order to cease injection operations, then the operator shall cease injection as soon as it is safe to do so. 3226. If the order is an emergency order, the operator shall immediately cease and desist the specified production facility operations and shall perform whatever work is required by the order to alleviate the emergency or shall permit the agents appointed by the supervisor to perform that work. If the order is an emergency order to cease injection, then the operator shall cease injection as soon as it is safe to do so.
(2)If an emergency order for testing or remedial work is set aside or modified on appeal, the supervisor shall refund the reasonable costs incurred by the operator for whatever work is not required by the set-aside or modified order or shall not impose costs for work performed by the supervisor or the supervisors agents if the work is excluded from the modified order or the order is set aside. Only the costs of remedial work performed shall be refunded, and there shall be no reimbursement for lost profits or increased production costs.
(3)(A) The costs to be refunded pursuant to paragraph (2) by the supervisor shall be determined in a hearing before the director after the exhaustion of appeals. The operator shall have the burden of proving the amount of costs to be refunded.
(B)A determination by the director as to the amount of costs to be refunded pursuant to paragraph (2) may be appealed by the operator pursuant to subdivision (a) of Section 3354.
(4)If the operator believes that it will be irretrievably injured by the performance of the work required to cease injection operations or to alleviate the emergency pending the outcome of the appeal, the operator may seek an order from the appropriate superior court restraining the enforcement of the order pending the outcome of the appeal.
SEC. 5.Section 3351 of the Public Resources Code is amended to read:3351.(a)A hearing shall be provided in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code only in an appeal from an order in the following circumstances:
(1)Issued pursuant to a Section 3237 finding that the operators wells are deserted and should be plugged and abandoned.
(2)Imposing civil penalties totaling more than twenty-five thousand dollars ($25,000).
(3)Rescinding an entire injection project approval for a project that has already commenced.
(4)Imposing a life-of-well bond or a life-of-production facility bond.
(b)An order issued pursuant to Section 3225 shall satisfy the substantive requirements of an accusation pursuant to Section 11503 of the Government Code and may be filed when scheduling a formal hearing in accordance with this chapter and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. All applicable formal hearing deadlines do not commence until a formal hearing is scheduled. When scheduling a formal hearing after an appeal from an order under this chapter, the supervisor is not required to send a Notice of Defense statement and the operator is not required to request a hearing.
(c)For an appeal of an order that is not described in subdivision (a), a hearing shall be conducted by the director in accordance with Sections 3352 and 3353.
(d)For an appeal of an order that is described in subdivision (a) and is also an emergency order for testing or remedial work or to cease and desist production facility operations, order, a hearing shall be conducted by the director in accordance with Sections 3352 and 3353 for the limited purpose of considering the reasonableness of the supervisors determination that an emergency exists. All other penalties and requirements imposed by the order shall be considered at a hearing provided in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
SEC. 6.Section 3352 of the Public Resources Code is amended to read:3352.(a)A hearing conducted by the director shall adhere to the following:
(1)When an order is not issued as an emergency order, within 30 days from the date of the service of the notice of appeal, the director shall provide to the operator notice of the time and place of the hearing. The hearing shall take place within 30 days after the date of the directors notice. The notice shall inform the operator that the director may extend the date of the hearing for up to 60 days for good cause upon his or her own motion, or an application of the operator or the supervisor.
(2)When an order has been issued as an emergency order or when the order is to cease injection operations order, within 10 days from the date of the service of the notice of appeal, the director shall provide to the operator notice of the time and place of the hearing. The hearing shall take place within 20 days after the date of the directors notice. The notice shall inform the operator that the director may extend the date of the hearing for up to 30 days for good cause upon his or her own motion, or an application of the operator or the supervisor.
(b)The director shall conduct the hearing within the district where the majority of the wells or production facilities that are the subject of the order are located, or the hearing may be conducted at a location outside of that district upon application of the operator. The hearing shall be reported by a stenographic reporter.
(c)The notice of hearing shall inform the operator of its right to file a written answer to the charges no later than 10 days before the date of the hearing. The notice also shall inform the operator that it has the right to present oral and documentary evidence at the hearing.
(d)Upon a verified and timely petition of the operator, the director may order the testimony of a witness at the hearing. The petition shall be served upon the director and the other party within five days after the filing of an appeal and shall set forth the name and address of the witness whose testimony is requested, to the extent known; a showing of the materiality of the testimony; and a showing that the witness cannot be compelled to testify absent an order of the director. The supervisor may file an opposition to the petition within five days after the petition is served. The director shall either deny or grant the petition within 10 days after receipt of the petition. Upon granting a petition, the director shall issue a subpoena pursuant to Section 3357 compelling the testimony of the witness at the hearing. Obtaining subpoenas may be considered good cause to extend the date of the hearing under paragraph (1) or (2) of subdivision (a).
(e)The director may convert a hearing pursuant to this section to a formal hearing conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code in any of the following circumstances:
(1)The operator makes a showing satisfactory to the director that the order being appealed is likely to result in termination of an established oil or gas producing or injection operation.
(2)It appears to the director that the hearing will involve complex evidentiary or procedural issues that will cause more than minimal delay or burdens.
(3)The operator and the supervisor agree and stipulate to convert the hearing to a formal hearing.
(f)The conversion of a hearing pursuant to this section to a formal hearing shall be conducted in accordance with Article 15 (commencing with Section 11470.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code. If a hearing for an appeal of an emergency order or an order to cease injection operations is converted to a formal hearing, the supervisor shall endeavor to schedule and notice a formal emergency hearing as soon as reasonably possible and, notwithstanding Section 11517 of the Government Code, the director shall only have 30 days from receipt of the administrative law judges proposed emergency hearing decision to act as prescribed in subparagraphs (A) to (E), inclusive, of paragraph (2) of subdivision (c) of Section 11517 of the Government Code.
(g)The director or his or her designee shall permit inconspicuous personal recording devices to be used by persons during a hearing pursuant to this section to make sound recordings as personal notes of the proceedings. A person proposing to use a recording device shall provide advance notice to the director or his or her designee. The recordings may not be used for any purpose other than as personal notes.
SEC. 7.Section 3356 of the Public Resources Code is amended to read:3356.(a)If the operator does not appeal an order, if the operator does not timely seek judicial review of a decision affirming or modifying an order within the time provided in Section 3354, or if the operator has timely sought and obtained judicial review and the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose on the operator for work performed by the supervisor or the supervisors agents, and any civil penalties imposed under Section 3236.5 shall constitute a state tax lien against the real and personal property of the operator pursuant to Section 3423.
(b)In addition to a state tax lien, the supervisor may apply to the appropriate superior court for a clerks judgment. The application, which shall include a certified copy of the final agency order or decision, shall constitute a sufficient showing to warrant the issuance of the judgment. The court clerk shall enter the judgment immediately in conformity with the application. The judgment so entered shall have the same force and effect as, and shall be subject to all the provisions of law relating to, a judgment in a civil action, and may be enforced in the same manner as any other judgment of the court. The court shall make enforcement of the judgment a priority.
SEC. 8.Section 3357 of the Public Resources Code is amended to read:3357.(a)In any proceeding before the director, and in any proceeding instituted by the supervisor for the purpose of enforcing or carrying out the provisions of this division, or for the purpose of holding an investigation to ascertain the condition of any well or wells complained of, or which in the opinion of the supervisor may reasonably be presumed to be improperly located, drilled, operated, maintained, or conducted, the supervisor and the director shall have the power to administer oaths and may apply to a judge of the superior court of the county in which the proceeding or investigation is pending for subpoenas for witnesses to attend the proceeding or investigation. Upon the application of the supervisor or the director, the judge of the superior court shall assign a case number for the proceeding or investigation, shall issue an order prescribing the nature and scope of the proceeding or investigation, and shall retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation. Upon the assigning of a case number, the attorney of record for the supervisor or director may issue subpoenas directing witnesses to attend the proceeding or investigation, and those persons shall be required to produce, when directed, all records, surveys, documents, books, or accounts in the witness custody or under the witness control; except that no person shall be required to attend upon the proceeding unless the person resides within the same county or within 100 miles of the place of attendance. The attorney of record for the supervisor or the director may in that case cause the depositions of witnesses residing within or without the state to be taken in the manner prescribed by law for like depositions in civil actions in superior courts of this state under Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure, and may issue subpoenas compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at designated places within the limits prescribed in this section.
(b)(1)In conducting a proceeding or investigation specified in subdivision (a), the supervisor or director may require an owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the supervisor or director requires. The burden, including costs, of any report shall bear a reasonable relationship to the need for the report and the benefits to be obtained from the report. In requiring a report, the supervisor or director shall explain in writing to the owner or operator the need for the report, and shall identify the rationale that supports requiring that owner or operator to provide the report.
(2)When requested by the owner or operator furnishing the report, neither the division nor the department shall make available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status pursuant to Section 3234, or other confidential or privileged information. The division or department shall make that confidential or privileged information available to other public agencies as needed for regulatory purposes and in accordance with a written agreement with the other public agency regarding the sharing of the information.
(c)In conducting a proceeding or investigation pursuant to subdivision (a), the supervisor or director, or his or her inspector, may inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the requirements of or authorized by this division. The inspection shall be made with the consent of the owner or operator or, if consent is withheld, with a warrant duly issued pursuant to the procedure set forth in Title 13 (commencing with Section 1822.50) of Part 3 of the Code of Civil Procedure. In the event of an emergency affecting the public health or safety, an inspection may be performed without consent or a warrant. This subdivision is in addition to any other inspection authority granted or authorized by this division.
SEC. 9.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)A person who violates this chapter or a regulation implementing this chapter is is, at the supervisors discretion, subject to a civil penalty not to exceed twenty-five thousand dollars ($25,000) as described in subdivision (b) for each violation. At the supervisors discretion, each day a violation continues or is not cured may be treated as a separate violation. For each day a violation of Article 3 (commencing with Section 3150) continues or is not cured, the civil penalty amount shall be not less than ten thousand dollars ($10,000). An act of God and an act of vandalism beyond the reasonable control of the operator shall not be considered a violation. The civil penalty shall be imposed by an order of the supervisor pursuant to Section 3225 upon a determination that a violation has been committed by the person charged. The imposition of a civil penalty under this section shall be in addition to any other penalty provided by law for the violation. When establishing the amount of the civil penalty pursuant to this section, the supervisor may shall consider, in addition to other relevant circumstances, all of the following:
(1)The extent of harm or potential harm caused by the violation.
(2)The persistence of the violation.
(3)The pervasiveness of the violation.
(4)The number of prior violations by the same violator.
(5)The degree of culpability of the violator.
(6)Any economic benefit to the violator resulting from the violation.
(7)The violators assets, liabilities, and net worth. ability to pay the civil penalty amount, as determined based on information publicly available to the division.(8)The supervisors prosecution costs.(b)(1)(A)A well stimulation violation is a violation of Article 3 (commencing with Section 3150) or the regulations implementing that article.
(B)The civil penalty amount for a well stimulation violation shall be not less than ten thousand dollars ($10,000) per day per violation and not more than twenty-five thousand dollars ($25,000) per day per violation.
(2)(A)A major violation is a violation that is not a well stimulation violation and that is one or more of the following:
(i)A violation that results in harm to persons or property or presents a significant threat to human health or the environment.
(ii)A knowing, willful, or intentional violation.
(iii)A chronic violation or one that is committed by a recalcitrant violator. In determining whether a violation is chronic or a violator is recalcitrant, the supervisor shall consider whether there is evidence indicating that the violator has engaged in a pattern of neglect or disregard with respect to applicable requirements.
(iv)A violation where the violator derived significant economic benefit, either by significantly reduced costs or a significant competitive advantage.
(B)The civil penalty amount for a major violation shall be not less than two thousand five hundred dollars ($2,500) per violation and not more than twenty-five thousand dollars ($25,000) per violation.
(3)(A)A minor violation is a violation that is neither a well stimulation violation nor a major violation.
(B) The civil penalty amount for a minor violation shall be not more than five thousand dollars ($5,000) per violation.
(4)At the supervisors discretion, each day a major or minor violation continues or is not cured may be treated as a separate violation.
(b)
(c)An order of the supervisor imposing a civil penalty shall be reviewable pursuant to Article 6 (commencing with Section 3350). When the order of the supervisor has become final and the penalty has not been paid, the supervisor may apply to the appropriate superior court for an order directing payment of the civil penalty. The supervisor may also seek from the court an order directing that production from the well or use of the production facility that is the subject of the civil penalty order be discontinued until the violation has been remedied to the satisfaction of the supervisor and the civil penalty has been paid.
(c)
(d)The supervisor may allow a supplemental environmental project in lieu of a portion of the civil penalty amount. The supplemental environmental project may not be more than 50 percent of the total civil penalty amount. Any amount collected under this section that is not allocated for a supplemental environmental project shall be deposited in the Oil, Gas, and Geothermal Administrative Fund. Oil and Gas Environmental Remediation Account established pursuant to Section 3261.
(d)
(e)Supplemental environmental project means an environmentally beneficial project that a person, subject to an order of the supervisor imposing a civil penalty, voluntarily agrees to undertake in settlement of the action and to offset a portion of a civil penalty.
(e)Civil penalties assessed pursuant to this section shall be deposited in the Oil and Gas Environmental Remediation Account established pursuant to Section 3261.
SEC. 2.Article 4.3 (commencing with Section 3260) of Chapter 1 of Division 3 of the Public Resources Code is repealed.SEC. 3.Article 4.3 (commencing with Section 3260) is added to Chapter 1 of Division 3 of the Public Resources Code, to read:4.3.Oil and Gas Environmental Remediation Account3260.For purposes of this article, account means the Oil and Gas Environmental Remediation Account established under Section 3261.
3261.(a)Notwithstanding any other provision of this chapter, including the expenditure limitations of Section 3258, the division shall administer and manage the Oil and Gas Environmental Remediation Account, which is hereby established in the Oil, Gas, and Geothermal Administrative Fund.
(b)Moneys in the account shall be used, upon appropriation by the Legislature, to plug and abandon oil and gas wells, decommission attendant facilities, or otherwise remediate sites that the supervisor determines could pose a danger to life, health, water quality, wildlife, or natural resources if there is no operator determined by the supervisor to be responsible for plugging and abandoning the well remediation pursuant to subdivision (c) of Section 3237 or who is able to respond.
3262.The division may adopt regulations to implement this article.
SEC. 4.Section 3350 of the Public Resources Code is amended to read:3350.(a)The operator of a well or a production facility to whom the supervisor or district deputy has issued an order pursuant to this chapter may file a notice of appeal from that order. The notice of appeal shall be in writing and shall be filed with the director. The operator shall file the appeal within 10 days of the service of the order, or within 10 days of the posting of a copy of an order made pursuant to Section 3308. Failure of the operator to file an appeal from the order within the 10-day period shall be a waiver by the operator of its rights to challenge the order. If the order, other than an order made pursuant to Section 3308, is served by mail, the time for responding shall be determined as provided in Section 1013 of the Code of Civil Procedure.
(b)(1)The filing of a written notice of appeal shall operate as a stay of the order, except when an order for testing or remedial work or an order to cease and desist production facility operations is issued as an emergency order pursuant to Section 3226, or when the order is to cease injection operations. If the order is an order to cease injection operations, then the operator shall cease injection as soon as it is safe to do so. If the order is an emergency order, the operator shall immediately cease and desist the specified production facility operations and shall perform whatever work is required by the order to alleviate the emergency or shall permit the agents appointed by the supervisor to perform that work.
(2)If an emergency order for testing or remedial work is set aside or modified on appeal, the supervisor shall refund the reasonable costs incurred by the operator for whatever work is not required by the set-aside or modified order or shall not impose costs for work performed by the supervisor or the supervisors agents if the work is excluded from the modified order or the order is set aside. Only the costs of remedial work performed shall be refunded, and there shall be no reimbursement for lost profits or increased production costs.
(3)(A) The costs to be refunded pursuant to paragraph (2) by the supervisor shall be determined in a hearing before the director after the exhaustion of appeals. The operator shall have the burden of proving the amount of costs to be refunded.
(B)A determination by the director as to the amount of costs to be refunded pursuant to paragraph (2) may be appealed by the operator pursuant to subdivision (a) of Section 3354.
(4)If the operator believes that it will be irretrievably injured by the performance of the work required to cease injection operations or to alleviate the emergency pending the outcome of the appeal, the operator may seek an order from the appropriate superior court restraining the enforcement of the order pending the outcome of the appeal.
SEC. 5.Section 3351 of the Public Resources Code is amended to read:3351.(a)A hearing shall be provided in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code only in an appeal from an order in the following circumstances:
(1)Issued pursuant to a Section 3237 finding that the operators wells are deserted and should be plugged and abandoned.
(2)Imposing civil penalties totaling more than twenty-five thousand dollars ($25,000).
(3)Rescinding an entire injection project approval for a project that has already commenced.
(4)Imposing a life-of-well bond or a life-of-production facility bond.
(b)An order issued pursuant to Section 3225 shall satisfy the substantive requirements of an accusation pursuant to Section 11503 of the Government Code and may be filed when scheduling a formal hearing in accordance with this chapter and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. All applicable formal hearing deadlines do not commence until a formal hearing is scheduled. When scheduling a formal hearing after an appeal from an order under this chapter, the supervisor is not required to send a Notice of Defense statement and the operator is not required to request a hearing.
(c)For an appeal of an order that is not described in subdivision (a), a hearing shall be conducted by the director in accordance with Sections 3352 and 3353.
(d)For an appeal of an order that is described in subdivision (a) and is also an emergency order for testing or remedial work or to cease and desist production facility operations, a hearing shall be conducted by the director in accordance with Sections 3352 and 3353 for the limited purpose of considering the reasonableness of the supervisors determination that an emergency exists. All other penalties and requirements imposed by the order shall be considered at a hearing provided in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
SEC. 6.Section 3352 of the Public Resources Code is amended to read:3352.(a)A hearing conducted by the director shall adhere to the following:
(1)When an order is not issued as an emergency order, within 30 days from the date of the service of the notice of appeal, the director shall provide to the operator notice of the time and place of the hearing. The hearing shall take place within 30 days after the date of the directors notice. The notice shall inform the operator that the director may extend the date of the hearing for up to 60 days for good cause upon his or her own motion, or an application of the operator or the supervisor.
(2)When an order has been issued as an emergency order, order or when the order is to cease injection operations within 10 days from the date of the service of the notice of appeal, the director shall provide to the operator notice of the time and place of the hearing. The hearing shall take place within 20 days after the date of the directors notice. The notice shall inform the operator that the director may extend the date of the hearing for up to 30 days for good cause upon his or her own motion, or an application of the operator or the supervisor.
(b)The director shall conduct the hearing within the district where the majority of the wells or production facilities that are the subject of the order are located, or the hearing may be conducted at a location outside of that district upon application of the operator. The hearing shall be reported by a stenographic reporter.
(c)The notice of hearing shall inform the operator of its right to file a written answer to the charges no later than 10 days before the date of the hearing. The notice also shall inform the operator that it has the right to present oral and documentary evidence at the hearing.
(d)Upon a verified and timely petition of the operator, the director may order the testimony of a witness at the hearing. The petition shall be served upon the director and the other party within five days after the filing of an appeal and shall set forth the name and address of the witness whose testimony is requested, to the extent known; a showing of the materiality of the testimony; and a showing that the witness cannot be compelled to testify absent an order of the director. The supervisor may file an opposition to the petition within five days after the petition is served. The director shall either deny or grant the petition within 10 days after receipt of the petition. Upon granting a petition, the director shall issue a subpoena pursuant to Section 3357 compelling the testimony of the witness at the hearing. Obtaining subpoenas may be considered good cause to extend the date of the hearing under paragraph (1) or (2) of subdivision (a).
(e)The director may convert a hearing pursuant to this section to a formal hearing conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code in any of the following circumstances:
(1)The operator makes a showing satisfactory to the director that the order being appealed is likely to result in termination of an established oil or gas producing or injection operation.
(2)It appears to the director that the hearing will involve complex evidentiary or procedural issues that will cause more than minimal delay or burdens.
(3)The operator and the supervisor agree and stipulate to convert the hearing to a formal hearing.
(f)The conversion of a hearing pursuant to this section to a formal hearing shall be conducted in accordance with Article 15 (commencing with Section 11470.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code. If a hearing for an appeal of an emergency order or an order to cease injection operations is converted to a formal hearing, the supervisor shall endeavor to schedule and notice a formal emergency hearing as soon as reasonably possible and, notwithstanding Section 11517 of the Government Code, the director shall only have 30 days from receipt of the administrative law judges proposed emergency hearing decision to act as prescribed in subparagraphs (A) to (E), inclusive, of paragraph (2) of subdivision (c) of Section 11517 of the Government Code.
(g)The director or his or her designee shall permit inconspicuous personal recording devices to be used by persons during a hearing pursuant to this section to make sound recordings as personal notes of the proceedings. A person proposing to use a recording device shall provide advance notice to the director or his or her designee. The recordings may not be used for any purpose other than as personal notes.
SEC. 7.Section 3356 of the Public Resources Code is amended to read:3356.(a)If the operator does not appeal an order, if the operator does not timely seek judicial review of a decision affirming or modifying an order within the time provided in Section 3354, or if the operator has timely sought and obtained judicial review and the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose on the operator for work performed by the supervisor or the supervisors agents, and any civil penalties imposed under Section 3236.5 shall constitute a state tax lien against the real and personal property of the operator pursuant to Section 3423.
(b)In addition to a state tax lien, the supervisor may apply to the appropriate superior court for a clerks judgment. The application, which shall include a certified copy of the final agency order or decision, shall constitute a sufficient showing to warrant the issuance of the judgment. The court clerk shall enter the judgment immediately in conformity with the application. The judgment so entered shall have the same force and effect as, and shall be subject to all the provisions of law relating to, a judgment in a civil action, and may be enforced in the same manner as any other judgment of the court. The court shall make enforcement of the judgment a priority.
SEC. 8.Section 3357 of the Public Resources Code is amended to read:3357.(a)In any proceeding before the director, and in any proceeding instituted by the supervisor for the purpose of enforcing or carrying out the provisions of this division, or for the purpose of holding an investigation to ascertain the condition of any well or wells complained of, or which in the opinion of the supervisor may reasonably be presumed to be improperly located, drilled, operated, maintained, or conducted, the supervisor and the director shall have the power to administer oaths and may apply to a judge of the superior court of the county in which the proceeding or investigation is pending for subpoenas for witnesses to attend the proceeding or investigation. Upon the application of the supervisor or the director, the judge of the superior court shall assign a case number for the proceeding or investigation, shall issue an order prescribing the nature and scope of the proceeding or investigation, and shall retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation. Upon the assigning of a case number, the attorney of record for the supervisor or director may issue subpoenas directing witnesses to attend the proceeding or investigation, and those persons shall be required to produce, when directed, all records, surveys, documents, books, or accounts in the witness custody or under the witness control; except that no person shall be required to attend upon the proceeding unless the person resides within the same county or within 100 miles of the place of attendance. The attorney of record for the supervisor or the director may in that case cause the depositions of witnesses residing within or without the state to be taken in the manner prescribed by law for like depositions in civil actions in superior courts of this state under Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure, and may issue subpoenas compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at designated places within the limits prescribed in this section.
(b)(1)In conducting a proceeding or investigation specified in subdivision (a), the supervisor or director may require an owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the supervisor or director requires. The burden, including costs, of any report shall bear a reasonable relationship to the need for the report and the benefits to be obtained from the report. In requiring a report, the supervisor or director shall explain in writing to the owner or operator the need for the report, and shall identify the evidence rationale that supports requiring that owner or operator to provide the report.
(2)When requested by the owner or operator furnishing the report, neither the division nor the department shall make available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status pursuant to Section 3234, or other confidential or privileged information. The division or department shall make that confidential or privileged information available to other public agencies as needed for regulatory purposes and in accordance with a written agreement with the other public agency regarding the sharing of the information.
(c)In conducting a proceeding or investigation pursuant to subdivision (a), the supervisor or director, or his or her inspector, may inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the requirements of or authorized by this division. The inspection shall be made with the consent of the owner or operator or, if consent is withheld, with a warrant duly issued pursuant to the procedure set forth in Title 13 (commencing with Section 1822.50) of Part 3 of the Code of Civil Procedure. In the event of an emergency affecting the public health or safety, an inspection may be performed without consent or a warrant. This subdivision is in addition to any other inspection authority granted or authorized by this division.
(d)As used in this section, evidence means any relevant evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule that might make improper the admission of the evidence over objection in a civil action.
SEC. 9.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)A person who violates this chapter or a regulation implementing this chapter is subject to a civil penalty not to exceed twenty-five thousand dollars ($25,000) for each violation. At the supervisors discretion, each day a violation continues or is not cured may be treated as a separate violation. For each day a violation of Article 3 (commencing with Section 3150) continues or is not cured, the civil penalty amount shall not be be not less than ten thousand dollars ($10,000). An act of God and an act of vandalism beyond the reasonable control of the operator shall not be considered a violation. The civil penalty shall be imposed by an order of the supervisor pursuant to Section 3225 upon a determination that a violation has been committed by the person charged. The imposition of a civil penalty under this section shall be in addition to any other penalty provided by law for the violation. When establishing the amount of the civil penalty pursuant to this section, the supervisor may consider, in addition to other relevant circumstances, all of the following:
(1)The extent of harm or potential harm caused by the violation.
(2)The persistence of the violation.
(3)The pervasiveness of the violation.
(4)The number of prior violations by the same violator.
(5)The degree of culpability of the violator.
(6)Any economic benefit to the violator resulting from the violation.
(7)The violators assets, liabilities, and net worth.
(8)The supervisors prosecution costs.
(b)An order of the supervisor imposing a civil penalty shall be reviewable pursuant to Article 6 (commencing with Section 3350). When the order of the supervisor has become final and the penalty has not been paid, the supervisor may apply to the appropriate superior court for an order directing payment of the civil penalty. The supervisor may also seek from the court an order directing that production from the well or use of the production facility that is the subject of the civil penalty order be discontinued until the violation has been remedied to the satisfaction of the supervisor and the civil penalty has been paid.
(c)The supervisor may allow a supplemental environmental project in lieu of a portion of the civil penalty amount. The supplemental environmental project may not be more than 50 percent of the total civil penalty amount. Any amount collected under this section that is not allocated for a supplemental environmental project shall be deposited in the Oil, Gas, and Geothermal Administrative Fund.
(d)Supplemental environmental project means an environmentally beneficial project that a person, subject to an order of the supervisor imposing a civil penalty, voluntarily agrees to undertake in settlement of the action and to offset a portion of a civil penalty.
(e)Civil penalties assessed pursuant to this section shall be deposited in the Oil and Gas Environmental Remediation Account established pursuant to Section 3261.
SEC. 2.Article 4.3 (commencing with Section 3260) of Chapter 1 of Division 3 of the Public Resources Code is repealed.SEC. 3.Article 4.3 (commencing with Section 3260) is added to Chapter 1 of Division 3 of the Public Resources Code, to read:4.3.Oil and Gas Environmental Remediation Account3260.For purposes of this article, account means the Oil and Gas Environmental Remediation Account established under Section 3261.
3261.(a)Notwithstanding any other provision of this chapter, including the expenditure limitations of Section 3258, the division shall administer and manage the Oil and Gas Environmental Remediation Account, which is hereby established in the Oil, Gas, and Geothermal Administrative Fund.
(b)Moneys in the account shall be used, upon appropriation by the Legislature, to plug and abandon oil and gas wells, decommission attendant facilities, or otherwise remediate sites that the supervisor determines could pose a danger to life, health, water quality, wildlife, or natural resources if there is no operator determined by the supervisor to be responsible for plugging and abandoning the well pursuant to subdivision (c) of Section 3237 or who is able to respond.
3262.The division may adopt regulations to implement this article.
SEC. 2.SEC. 4.Section 3350 of the Public Resources Code is amended to read:3350.(a)The operator of a well or a production facility to whom the supervisor or district deputy has issued an order pursuant to this chapter may file a notice of appeal from that order. The notice of appeal shall be in writing and shall be filed with the director. The operator shall file the appeal within 10 days of the service of the order, or within 10 days of the posting of a copy of an order made pursuant to Section 3308. Failure of the operator to file an appeal from the order within the 10-day period shall be a waiver by the operator of its rights to challenge the order. If the order, other than an order made pursuant to Section 3308, is served by mail, the time for responding shall be determined as provided in Section 1013 of the Code of Civil Procedure.
(b)(1)The filing of a written notice of appeal shall operate as a stay of the order, except when an order for testing or remedial work or an order to cease and desist production facility operations is issued as an emergency order pursuant to Section 3226, or when the order is to cease injection operations. If the order is an order to cease injection operations, then the operator shall cease injection as soon as it is safe to do so. If the order is an emergency order, the operator shall immediately cease and desist the specified production facility operations and shall perform whatever work is required by the order to alleviate the emergency or shall permit the agents appointed by the supervisor to perform that work.
(2)If an emergency order for testing or remedial work is set aside or modified on appeal, the supervisor shall refund the reasonable costs incurred by the operator for whatever work is not required by the set-aside or modified order or shall not impose costs for work performed by the supervisor or the supervisors agents if the work is excluded from the modified order or the order is set aside. Only the costs of remedial work performed shall be refunded, and there shall be no reimbursement for lost profits or increased production costs.
(3)(A) The costs to be refunded pursuant to paragraph (2) by the supervisor shall be determined in a hearing before the director after the exhaustion of appeals. The operator shall have the burden of proving the amount of costs to be refunded.
(B)A determination by the director as to the amount of costs to be refunded pursuant to paragraph (2) may be appealed by the operator pursuant to subdivision (a) of Section 3354.
(4)If the operator believes that it will be irretrievably injured by the performance of the work required to alleviate the emergency pending the outcome of the appeal, the operator may seek an order from the appropriate superior court restraining the enforcement of the order pending the outcome of the appeal.
SEC. 3.SEC. 5.Section 3351 of the Public Resources Code is amended to read:3351.(a)A hearing shall be provided in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code only in an appeal from an order in the following circumstances:
(1)Issued pursuant to a Section 3237 finding that the operators wells are deserted and should be plugged and abandoned.
(2)Imposing civil penalties totaling more than twenty-five thousand dollars ($25,000).
(3)Rescinding an entire injection project approval for a project that has already commenced.
(4)Imposing a life-of-well bond or a life-of-production facility bond.
(b)An order issued pursuant to Section 3225 shall satisfy the substantive requirements of an accusation pursuant to Section 11503 of the Government Code and may be filed when scheduling a formal hearing in accordance with this chapter and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. All applicable formal hearing deadlines do not commence until a formal hearing is scheduled. When scheduling a formal hearing after an appeal from an order under this chapter, the supervisor is not required to send a Notice of Defense statement and the operator is not required to request a hearing.
(c)For an appeal of an order that is not described in subdivision (a), a hearing shall be conducted by the director in accordance with Sections 3352 and 3353.
(d)For an appeal of an order that is described in subdivision (a) and is also an emergency order for testing or remedial work or to cease and desist production facility operations, a hearing shall be conducted by the director in accordance with Sections 3352 and 3353 for the limited purpose of considering the reasonableness of the supervisors determination that an emergency exists. All other penalties and requirements imposed by the order shall be considered at a hearing provided in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
SEC. 4.SEC. 6.Section 3352 of the Public Resources Code is amended to read:3352.(a)A hearing conducted by the director shall adhere to the following:
(1)When an order is not issued as an emergency order, within 30 days from the date of the service of the notice of appeal, the director shall provide to the operator notice of the time and place of the hearing. The hearing shall take place within 30 days after the date of the directors notice. The notice shall inform the operator that the director may extend the date of the hearing for up to 60 days for good cause upon his or her own motion, or an application of the operator or the supervisor.
(2)When an order has been issued as an emergency order, within 10 days from the date of the service of the notice of appeal, the director shall provide to the operator notice of the time and place of the hearing. The hearing shall take place within 20 days after the date of the directors notice. The notice shall inform the operator that the director may extend the date of the hearing for up to 30 days for good cause upon his or her own motion, or an application of the operator or the supervisor.
(b)The director shall conduct the hearing within the district where the majority of the wells or production facilities that are the subject of the order are located, or the hearing may be conducted at a location outside of that district upon application of the operator. The hearing shall be reported by a stenographic reporter.
(c)The notice of hearing shall inform the operator of its right to file a written answer to the charges no later than 10 days before the date of the hearing. The notice also shall inform the operator that it has the right to present oral and documentary evidence at the hearing.
(d)Upon a verified and timely petition of the operator, the director may order the testimony of a witness at the hearing. The petition shall be served upon the director and the other party within five days after the filing of an appeal and shall set forth the name and address of the witness whose testimony is requested, to the extent known; a showing of the materiality of the testimony; and a showing that the witness cannot be compelled to testify absent an order of the director. The supervisor may file an opposition to the petition within five days after the petition is served. The director shall either deny or grant the petition within 10 days after receipt of the petition. Upon granting a petition, the director shall issue a subpoena pursuant to Section 3357 compelling the testimony of the witness at the hearing. Obtaining subpoenas may be considered good cause to extend the date of the hearing under paragraph (1) or (2) of subdivision (a).
(e)The director may convert a hearing pursuant to this section to a formal hearing conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code in any of the following circumstances:
(1)The operator makes a showing satisfactory to the director that the order being appealed is likely to result in termination of an established oil or gas producing or injection operation.
(2)It appears to the director that the hearing will involve complex evidentiary or procedural issues that will cause more than minimal delay or burdens.
(3)The operator and the supervisor agree and stipulate to convert the hearing to a formal hearing.
(f)The conversion of a hearing pursuant to this section to a formal hearing shall be conducted in accordance with Article 15 (commencing with Section 11470.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code. If a hearing for an appeal of an emergency order is converted to a formal hearing, the supervisor shall endeavor to schedule and notice a formal emergency hearing as soon as reasonably possible and, notwithstanding Section 11517 of the Government Code, the director shall only have 30 days from receipt of the administrative law judges proposed emergency hearing decision to act as prescribed in subparagraphs (A) to (E), inclusive, of paragraph (2) of subdivision (c) of Section 11517 of the Government Code.
SEC. 5.SEC. 7.Section 3356 of the Public Resources Code is amended to read:3356.(a)If the operator does not appeal an order, if the operator does not timely seek judicial review of a decision affirming or modifying an order within the time provided in Section 3354, or if the operator has timely sought and obtained judicial review and the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose on the operator for work performed by the supervisor or the supervisors agents, and any civil penalties imposed under Section 3236.5 shall constitute a state tax lien against the real and personal property of the operator pursuant to Section 3423.
(b)In addition to a state tax lien, the supervisor may apply to the appropriate superior court for a clerks judgment. The application, which shall include a certified copy of the final agency order or decision, shall constitute a sufficient showing to warrant the issuance of the judgment. The court clerk shall enter the judgment immediately in conformity with the application. The judgment so entered shall have the same force and effect as, and shall be subject to all the provisions of law relating to, a judgment in a civil action, and may be enforced in the same manner as any other judgment of the court. The court shall make enforcement of the judgment a priority.
SEC. 6.SEC. 8.Section 3357 of the Public Resources Code is amended to read:3357.(a)In any proceeding before the director, and in any proceeding instituted by the supervisor for the purpose of enforcing or carrying out the provisions of this division, or for the purpose of holding an investigation to ascertain the condition of any well or wells complained of, or which in the opinion of the supervisor may reasonably be presumed to be improperly located, drilled, operated, maintained, or conducted, the supervisor and the director shall have the power to administer oaths and may apply to a judge of the superior court of the county in which the proceeding or investigation is pending for subpoenas for witnesses to attend the proceeding or investigation. Upon the application of the supervisor or the director, the judge of the superior court shall assign a case number for the proceeding or investigation, shall issue an order prescribing the nature and scope of the proceeding or investigation, and shall retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation. Upon the assigning of a case number, the attorney of record for the supervisor or director may issue subpoenas directing witnesses to attend the proceeding or investigation, and those persons shall be required to produce, when directed, all records, surveys, documents, books, or accounts in the witness custody or under the witness control; except that no person shall be required to attend upon the proceeding unless the person resides within the same county or within 100 miles of the place of attendance. The attorney of record for the supervisor or the director may in that case cause the depositions of witnesses residing within or without the state to be taken in the manner prescribed by law for like depositions in civil actions in superior courts of this state under Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure, and may issue subpoenas compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at designated places within the limits prescribed in this section.
(b)(1)In conducting a proceeding or investigation specified in subdivision (a), the supervisor or director may require an owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the supervisor or director requires. The burden, including costs, of any report shall bear a reasonable relationship to the need for the report and the benefits to be obtained from the report. In requiring a report, the supervisor or director shall explain in writing to the owner or operator the need for the report, and shall identify the evidence that supports requiring that owner or operator to provide the report.
(2)When requested by the owner or operator furnishing the report, neither the division nor the department shall make available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status pursuant to Section 3234, or other confidential or privileged information. The division or department shall make that confidential or privileged information available to other public agencies as needed for regulatory purposes and in accordance with a written agreement with the other public agency regarding the sharing of the information.
(c)In conducting a proceeding or investigation pursuant to subdivision (a), the supervisor or director, or his or her inspector, may inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the requirements of or authorized by this division. The inspection shall be made with the consent of the owner or operator or, if consent is withheld, with a warrant duly issued pursuant to the procedure set forth in Title 13 (commencing with Section 1822.50) of Part 3 of the Code of Civil Procedure. In the event of an emergency affecting the public health or safety, an inspection may be performed without consent or a warrant. This subdivision is in addition to any other inspection authority granted or authorized by this division.
(d)As used in this section, evidence means any relevant evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule that might make improper the admission of the evidence over objection in a civil action.
SEC. 7.SEC. 9.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)A person who violates this chapter or a regulation implementing this chapter is subject to a civil penalty not to exceed twenty-five thousand dollars ($25,000) for each violation. A person who commits At the supervisors discretion, each day a violation continues or is not cured may be treated as a separate violation. For each day a violation of Article 3 (commencing with Section 3150) is subject to a continues or is not cured, the civil penalty of amount shall not be less than ten thousand dollars ($10,000) and not to exceed twenty-five thousand dollars ($25,000) per day per violation. ($10,000). An act of God and an act of vandalism beyond the reasonable control of the operator shall not be considered a violation. The civil penalty shall be imposed by an order of the supervisor pursuant to Section 3225 upon a determination that a violation has been committed by the person charged. The imposition of a civil penalty under this section shall be in addition to any other penalty provided by law for the violation. When establishing the amount of the civil penalty pursuant to this section, the supervisor shall may consider, in addition to other relevant circumstances, all of the following:
(1)The extent of harm or potential harm caused by the violation.
(2)The persistence of the violation.
(3)The pervasiveness of the violation.
(4)The number of prior violations by the same violator.
(5)The degree of culpability of the violator.
(6)Any economic benefit to the violator resulting from the violation.
(7)The violators assets, liabilities, and net worth.
(8)The supervisors prosecution costs.
(b)An order of the supervisor imposing a civil penalty shall be reviewable pursuant to Article 6 (commencing with Section 3350). When the order of the supervisor has become final and the penalty has not been paid, the supervisor may apply to the appropriate superior court for an order directing payment of the civil penalty. The supervisor may also seek from the court an order directing that production from the well or use of the production facility that is the subject of the civil penalty order be discontinued until the violation has been remedied to the satisfaction of the supervisor and the civil penalty has been paid.
(c)The supervisor may allow a supplemental environmental project in lieu of a portion of the civil penalty amount. The supplemental environmental project may not be more than 50 percent of the total civil penalty amount. Any amount collected under this section that is not allocated for a supplemental environmental project shall be deposited in the Oil, Gas, and Geothermal Administrative Fund.
(d)Supplemental environmental project means an environmentally beneficial project that a person, subject to an order of the supervisor imposing a civil penalty, voluntarily agrees to undertake in settlement of the action and to offset a portion of a civil penalty.
SEC. 2.Section 3350 of the Public Resources Code is amended to read:3350.(a)The operator of a well or a production facility to whom the supervisor or district deputy has issued an order pursuant to this chapter may file a notice of appeal to the director from that order. The notice of appeal shall be in writing and shall be filed with the supervisor or with the district deputy who issued the order. director. The operator shall file the appeal within 10 days of the service of the order, or within 10 days of the posting of a copy of an order made pursuant to Section 3308. Failure of the operator to file an appeal from the order within the 10-day period shall be a waiver by the operator of its rights to challenge the order. If the order, other than an order made pursuant to Section 3308, is served by mail, the time for responding shall be determined as provided in Section 1013 of the Code of Civil Procedure.
(b)(1)The filing of a written notice of appeal shall operate as a stay of the order, except when an order for testing or remedial work or an order to cease and desist production facility operations is issued as an emergency order pursuant to Section 3226. 3226, or when the order is to cease injection operations. If the order is an order to cease injection operations, then the operator shall cease injection as soon as it is safe to do so. If the order is an emergency order, the operator shall immediately cease and desist the specified production facility operations and shall perform whatever work is required by the order to alleviate the emergency or shall permit the agents appointed by the supervisor to perform that work.
(2)If the an emergency order for testing or remedial work is set aside or modified on appeal, the supervisor shall refund the reasonable costs incurred by the operator for whatever work is not required by the set-aside or modified order or shall not impose costs for work performed by the supervisor or the supervisors agents if the work is excluded from the modified order or the order is set aside. Only the costs of remedial work performed shall be refunded, and there shall be no reimbursement for lost profits or increased production costs.
(3)(A) The costs to be refunded pursuant to paragraph (2) by the supervisor shall be determined in a hearing before the director after the exhaustion of appeals. The operator shall have the burden of proving the amount of costs to be refunded.
(B)A determination by the director as to the amount of costs to be refunded pursuant to paragraph (2) may be appealed by the operator pursuant to subdivision (a) of Section 3354.
(4)If the operator believes that it will be irretrievably injured by the performance of the work required to alleviate the emergency pending the outcome of the appeal, the operator may seek an order from the appropriate superior court restraining the enforcement of the order pending the outcome of the appeal.
SEC. 3.Section 3351 of the Public Resources Code is amended to read:3351.(a)A hearing shall be provided in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code only in an appeal from an order in the following circumstances:
(1)Issued pursuant to a Section 3237 finding that the operators wells are deserted and should be plugged and abandoned.
(2)Imposing civil penalties totaling more than ten twenty-five thousand dollars ($10,000). ($25,000).
(3)Rescinding an entire injection project approval for a project that has already commenced.
(4)Imposing a life-of-well bond or a life-of-production facility bond.
(b)An order issued pursuant to Section 3225 shall satisfy the requirement of substantive requirements of an accusation pursuant to Section 11503 of the Government Code that an accusation be filed. and may be filed when scheduling a formal hearing in accordance with this chapter and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code. All applicable formal hearing deadlines do not commence until a formal hearing is scheduled. When scheduling a formal hearing after an appeal from an order under this chapter, the supervisor is not required to send a Notice of Defense statement and the operator is not required to request a hearing.
(c)For an appeal of an order that is not described in subdivision (a), a hearing shall be conducted by the director in accordance with Sections 3352 and 3353.
(d)For an appeal of an order that is described in subdivision (a) and is also an emergency order for testing or remedial work or to cease and desist production facility operations, a hearing shall be conducted by the director in accordance with Sections 3352 and 3353 for the limited purpose of considering the emergency order for remedial work or to cease and desist operations. reasonableness of the supervisors determination that an emergency exists. All other penalties and requirements imposed by the order shall be considered at a hearing provided in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code.
SEC. 4.Section 3352 of the Public Resources Code is amended to read:3352.(a)A hearing conducted by the director shall adhere to the following:
(1)When an order is not issued as an emergency order, within 30 days from the date of the service of the notice of appeal, the director shall provide to the operator notice of the time and place of the hearing. The hearing shall take place within 30 days after the date of the directors notice. The notice shall inform the operator that the director may extend the date of the hearing for up to 60 days for good cause upon his or her own motion, or an application of the operator or the supervisor.
(2)When an order has been issued as an emergency order, within 10 days from the date of the service of the notice of appeal, the director shall provide to the operator notice of the time and place of the hearing. The hearing shall take place within 20 days after the date of the directors notice. The notice shall inform the operator that the director may extend the date of the hearing for up to 30 days for good cause upon his or her own motion, or an application of the operator or the supervisor.
(b)The director shall conduct the hearing within the district where the majority of the wells or production facilities that are the subject of the order are located, or the hearing may be conducted at a location outside of that district upon application of the operator. The hearing shall be reported by a stenographic reporter and may, in addition, be electronically recorded by either party. reporter.
(c)The notice of hearing shall inform the operator of its right to file a written answer to the charges no later than 10 days before the date of the hearing. The notice also shall inform the operator that it has the right to present oral and documentary evidence at the hearing.
(d)Upon a verified and timely petition of the operator, the director may order the testimony of a witness at the hearing. The petition shall be served upon the director and the other party within five days after the filing of an appeal and shall set forth the name and address of the witness whose testimony is requested, to the extent known; a showing of the materiality of the testimony; and a showing that the witness cannot be compelled to testify absent an order of the director. The supervisor may file an opposition to the petition within five days after the petition is served. The director shall either deny or grant the petition within 10 days after receipt of the petition and receiving any opposition to the petition. Upon granting a petition, the director shall issue a subpoena pursuant to Section 3357 compelling the testimony of the witness at the hearing. Obtaining subpoenas may be considered good cause to extend the date of the hearing under paragraph (1) or (2) of subdivision (a).
(e)The director may convert a hearing pursuant to this section to a formal hearing conducted in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code in any of the following circumstances:
(1)The operator makes a showing satisfactory to the director that the order being appealed is likely to result in termination of an established oil or gas producing or injection operation.
(2)It appears to the director that the hearing will involve complex evidentiary or procedural issues that will cause more than minimal delay or burdens.
(3)The operator and the supervisor agree and stipulate to convert the hearing to a formal hearing.
(f)The conversion of a hearing pursuant to this section to a formal hearing shall be conducted in accordance with Article 15 (commencing with Section 11470.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the Government Code. If a hearing for an appeal of an emergency order is converted to a formal hearing, the supervisor shall endeavor to schedule and notice a formal emergency hearing as soon as reasonably possible and, notwithstanding Section 11517 of the Government Code, the director shall only have 30 days from receipt of the administrative law judges proposed emergency hearing decision to act as prescribed in subparagraphs (A) to (E), inclusive, of paragraph (2) of subdivision (c) of Section 11517 of the Government Code.
SEC. 5.Section 3356 of the Public Resources Code is amended to read:3356.(a)If the operator does not appeal an order, if the operator does not timely seek judicial review of a decision affirming or modifying an order within the time provided in Section 3354, or if the operator has timely sought and obtained judicial review and the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose on the operator for work performed by the supervisor or the supervisors agents, and any civil penalties imposed under Section 3236.5 shall constitute a state tax lien against the real and personal property of the operator pursuant to Section 3423.
(b)In addition to a state tax lien, the supervisor may apply to the appropriate superior court for a clerks judgment. The application, which shall include a certified copy of the final agency order or decision, shall constitute a sufficient showing to warrant the issuance of the judgment. The court clerk shall enter the judgment immediately in conformity with the application. The judgment so entered shall have the same force and effect as, and shall be subject to all the provisions of law relating to, a judgment in a civil action, and may be enforced in the same manner as any other judgment of the court. The court shall make enforcement of the judgment a priority.
SEC. 6.Section 3357 of the Public Resources Code is amended to read:3357.(a)In any proceeding before the director, and in any proceeding instituted by the supervisor for the purpose of enforcing or carrying out the provisions of this division, or for the purpose of holding an investigation to ascertain the condition of any well or wells complained of, or which in the opinion of the supervisor may reasonably be presumed to be improperly located, drilled, operated, maintained, or conducted, the supervisor and the director shall have the power to administer oaths and may apply to a judge of the superior court of the county in which the proceeding or investigation is pending for a subpoena subpoenas for witnesses to attend the proceeding or investigation. Upon the application of the supervisor or the director, the judge of the superior court shall assign a case number for the proceeding or investigation, shall issue an order prescribing the nature and scope of the proceeding or investigation, and shall retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation. Upon the assigning of a case number, the attorney of record for the supervisor or director may issue a subpoena subpoenas directing the witness witnesses to attend the proceeding or investigation, and such person those persons shall be required to produce, when directed, all records, surveys, documents, books, or accounts in the witness custody or under the witness control; except that no person shall be required to attend upon such the proceeding unless the person resides within the same county or within 100 miles of the place of attendance. The attorney of record for the supervisor or the director may in such that case cause the depositions of witnesses residing within or without the state to be taken in the manner prescribed by law for like depositions in civil actions in superior courts of this state under Title 4 (commencing with Section 2016.010) of Part 4 of the Code of Civil Procedure, and may, upon application to a judge of the superior court of the county within which the proceeding or investigation is pending, obtain a subpoena may issue subpoenas compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at such designated places as the judge may designate within the limits prescribed in this section.
(b)(1)In conducting a proceeding or investigation specified in subdivision (a), the supervisor or director may require an owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the supervisor or director requires. The burden, including costs, of any report shall bear a reasonable relationship to the need for the report and the benefits to be obtained from the report. In requiring a report, the supervisor or director shall explain in writing to the owner or operator the need for the report, and shall identify the evidence that supports requiring that owner or operator to provide the report.
(2)When requested by the owner or operator furnishing the report, neither the division nor the department shall make available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status pursuant to Section 3234, or other confidential or privileged information. The division or department shall make that confidential or privileged information available to other public agencies as needed for regulatory purposes and in accordance with a written agreement with the other public agency regarding the sharing of the information.
(c)In conducting a proceeding or investigation pursuant to subdivision (a), the supervisor or director, or his or her inspector, may inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the requirements of or authorized by this division. The inspection shall be made with the consent of the owner or operator or, if consent is withheld, with a warrant duly issued pursuant to the procedure set forth in Title 13 (commencing with Section 1822.50) of Part 3 of the Code of Civil Procedure. In the event of an emergency affecting the public health or safety, an inspection may be performed without consent or a warrant. This subdivision is in addition to any other inspection authority granted or authorized by this division.
(d)As used in this section, evidence means any relevant evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule that might make improper the admission of the evidence over objection in a civil action.
SEC. 7.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
|
Date
|
Status
|
|---|---|
| Jun 2, 2016 | Read third time. Passed. Ordered to the Senate. |
| Sep 9, 2016 | Chaptered by Secretary of State - Chapter 274, Statutes of 2016. |
| Sep 9, 2016 | Approved by the Governor. |
| Aug 23, 2016 | Enrolled and presented to the Governor at 2 p.m. |
| Aug 16, 2016 | Read third time. Passed. Ordered to the Assembly. (Ayes 36. Noes 3.). |
| Aug 16, 2016 | Read third time. Passed. Ordered to the Assembly. (Ayes 36. Noes 3. Page 5011.). |
| Aug 16, 2016 | Read third time. Passed. Ordered to the Assembly. |
| Aug 16, 2016 | In Assembly. Ordered to Engrossing and Enrolling. |
| Aug 2, 2016 | Read second time. Ordered to third reading. |
| Aug 1, 2016 | From committee: Be placed on second reading file pursuant to Senate Rule 28.8. |
| Jun 29, 2016 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (June 28). Re-referred to Com. on APPR. |
| Jun 14, 2016 | From committee: Do pass and re-refer to Com. on JUD. (Ayes 7. Noes 1.) (June 14). Re-referred to Com. on JUD. |
| Jun 9, 2016 | Referred to Coms. on N.R. & W. and JUD. |
| Jun 6, 2016 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Jun 2, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 64. Noes 13.) |
| Jun 2, 2016 | Read third time. Passed. Ordered to the Senate. (Ayes 64. Noes 13. Page 5178.) |
| Feb 19, 2016 | Introduced. To print. |
| Jun 2, 2016 | Assembly Rule 69 suspended. (Page 5166.) |
| Jun 2, 2016 | Assembly Rule 69 suspended. |
| Jun 1, 2016 | Read third time and amended. Ordered to third reading. (Page 5075.) |
| Jun 1, 2016 | Read third time and amended. Ordered to third reading. |
| May 19, 2016 | Read second time. Ordered to third reading. |
| May 18, 2016 | From committee: Do pass. (Ayes 14. Noes 6.) (May 18). |
| May 12, 2016 | Re-referred to Com. on APPR. |
| May 11, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on APPR. Read second time and amended. |
| Apr 12, 2016 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 2.) (April 12). Re-referred to Com. on APPR. |
| Apr 11, 2016 | Re-referred to Com. on JUD. |
| Apr 7, 2016 | Read second time and amended. |
| Apr 6, 2016 | From committee: Amend, and do pass as amended and re-refer to Com. on JUD. (Ayes 7. Noes 2.) (April 4). |
| Mar 10, 2016 | Referred to Coms. on NAT. RES. and JUD. |
| Feb 22, 2016 | Read first time. |
| Feb 21, 2016 | From printer. May be heard in committee March 22. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Aug 16, 2016 | Assembly 3rd Reading AB2756 Thurmond By Lara | Senate Floor |
Passed |
|
| Jun 28, 2016 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Judiciary |
Passed |
|
| Jun 14, 2016 | Do pass, but first be re-referred to the Committee on [Judiciary] | Senate Standing Committee on Natural Resources and Water |
Passed |
|
| Jun 2, 2016 | AB 2756 THURMOND Assembly Third Reading | Assembly Floor |
Passed |
|
| May 18, 2016 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 12, 2016 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Judiciary |
Passed |
|
| Apr 4, 2016 | Do pass as amended and be re-referred to the Committee on [Judiciary] | Assembly Standing Committee on Natural Resources |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Alliance of Nurses for Healthy Environment | ** Support | Aug 16, 2016 |
| California Independent Petroleum Association (Cipa) | * Against | Jun 28, 2016 |
| California Interfaith Power and Light | ** Support | Aug 16, 2016 |
| California League Of Conservation Voters | ** Support | Aug 16, 2016 |
| California Manufacturers And Technology Association | * Against | May 18, 2016 |
| Center For Environmental Health | ** Support | Aug 16, 2016 |
| Clean Water Action | ** Support | Aug 16, 2016 |
| Department of Conservation | ** Support | Aug 16, 2016 |
| Director of the Department of Conservation | * Support | Apr 4, 2016 |
| Environmental Defense Fund | ** Support | Aug 16, 2016 |
| Environmental Working Group | ** Support | Aug 16, 2016 |
| Los Angeles, City Of | ** Support | Aug 16, 2016 |
| Mainstreet Moms | ** Support | Aug 16, 2016 |
| NAT. RES. | ** Against | Apr 4, 2016 |
| Sierra Club California | ** Support | Aug 16, 2016 |
| State Buildings and Construction Trades Council | * Support | May 18, 2016 |
| Western States Petroleum Association | * Against | May 18, 2016 |
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB |
THIRD READING
Bill No: AB 2756
:
SENATE NATURAL RES. & WATER COMMITTEE: 7-1, 6/14/16
AYES: Pavley, Stone, Allen, Hertzberg, Hueso, Monning, Wolk
NOES: Vidak
NO VOTE RECORDED: Jackson
SENATE JUDICIARY COMMITTEE: 7-0, 6/28/16
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 64-13, 6/2/16 - See last page for vote
SOURCE: Department of Conservation
DIGEST: This bill substantially revises the Division of Oil, Gas and Geothermal Resources’ civil penalty structure for violations and procedures for appeals of its orders among other changes related to its enforcement actions.
Existing law:
- Establishes the Division of Oil, Gas and Geothermal Resources (Division), the state’s oil and gas regulator, within the Department of Conservation (Department). The Department is led by its Director (director), and the state oil and gas supervisor (supervisor) leads the Division. District deputies lead each of the Division’s districts.
- Requires the Division to regulate the drilling, operation, maintenance, and abandonment of oil and gas wells in the state.
- Provides that a person who violated certain requirements related to the regulation of oil and gas is subject to a civil penalty not to exceed $25,000 per violation, although violations of well stimulation treatment statute are subject to civil penalties of $10,000 - $25,000 per violation per day.
- Requires the supervisor to consider specified circumstances when establishing the amount of the civil penalty.
- Establishes procedures for an operator of a well or production facility to appeal an order by the supervisor or a district deputy to the director. A notice of the appeal must be filed with the supervisor or the district deputy who issued the order.
- Provides that if the operator does not appeal an order, seek judicial review of a decision affirming or modifying an order within the time provided in law, or if the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose constitutes a state tax lien against the real and personal property of the operator.
- Sets forth numerous provisions governing discovery in the context of an informal hearing before the director. The supervisor or the director, upon application to a judge of the superior court of the county within which the proceeding or investigation is pending, is authorized to obtain a subpoena compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at such places as the judge may designate within the limits prescribed in these provisions.
- Establishes the Acute Orphan Well program and the Acute Orphan Well Account. An “acute orphan well” is a well that the supervisor determines could pose an immediate danger to life, health, or natural resources and there is no operator responsible or able to respond. The account is used, upon appropriation, to plug, abandon, and further secure an acute orphan well, as specified. The dedicated fee to support this account is expired and the Acute Orphan Well program is largely defunct.
- Allows the Division to spend up to $1 million annually to address certain hazardous and idle-deserted wells, as defined, including orphan wells.
This bill substantially revises the Division’s civil penalty structure for violations and procedures for appeals of its orders among other changes related to its enforcement actions.
Specifically this bill:
- Requires the supervisor to consider certain additional factors including, for example, any economic benefit to the violator from the violation, among others, relevant to determining whether a civil penalty shall be assessed and its amount.
- Establishes both “major” and “minor” violations, as specified. At the supervisor’s discretion, each day a violation continues may be treated as a separate violation.
- A major violation must meet one or more specified criteria, such as, for example, harming persons or property or being by a recalcitrant operator, among other things. A major violation shall be assessed at $2,500 to $25,000 per violation.
- A minor violation does not meet the criteria for a major violation and is assessed at not more than $2,500 per violation.
- Establishes an Oil and Gas Remediation Account to receive civil penalties. This account shall fund specified actions by the Division, including plugging and abandonment of oil and gas wells among other things. This account sunsets on January 1, 2021.
- The supervisor may allow an operator to perform a supplemental environmental project to offset up to 50% of a civil penalty. A supplemental environmental project is an “environmentally beneficial project” that a person subject to an order of the supervisor imposing a civil penalty voluntarily agrees to undertake, as specified.
- The Oil and Gas Remediation Account replaces the Acute Orphan Well Program which is repealed.
- Makes numerous changes to the appeal process and procedures. Among other things, these include:
- The notice of appeal is filed with the director.
- Exceptions for when the notice of appeal operates as a stay of the order are revised.
- Refundable costs are revised, as specified, in the event an emergency order is set aside or overturned on appeal.
- The director may extend the date of a hearing for good cause.
- The circumstances are revised, as specified, in which appeals are heard in a formal hearing process before an administrative law judge instead of before the director in an informal hearing process.
- Authorizes the supervisor to apply, for penalties due to uncontested or affirmed orders, as specified, to the appropriate superior court for a clerk’s judgment in order to provide an additional enforcement mechanism, as specified.
- Revises existing procedures and processes to the existing discovery process. Among other provisions, these include:
- A judge of the superior court, upon application by the supervisor or director, is required to assign a case number for the proceeding or investigation, to issue an order prescribing the nature and scope of the proceeding or investigation, and to retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation.
- The attorney of record for the supervisor or director is authorized to issue subpoenas compelling the attendance of witnesses and the production of certain records, as specified.
- The supervisor, director, or certain inspector is authorized to inspect the well site or production facility to ascertain whether certain requirements are being met, as specified.
- The supervisor or director is authorized to require the owner or operator to provide certain technical reports, as specified.
- The Division and the Department are required to keep certain confidential material, as specified, from public release.
Comments
The new penalty structure allows the supervisor to assess penalties in line with the harm caused. The existing structure is limited and inflexible.
The Division has no established general formal policy for the handling of proprietary information. The Division is required under its own statutes to handle trade secrets associated with well stimulation treatment chemicals in a certain way. It is also required to keep certain information about prospective wells confidential for limited periods of time. The Division, however, has no established formal procedures for the handling of trade secrets or other confidential information. While this bill provides protections from public disclosure to proprietary information, it is not clear on what basis or bases that protection is established which may result in information held in confidence that does not warrant it.
The Division has existing and ongoing programs that address orphan wells. While the bill repeals the largely defunct Acute Orphan Well program language, supplemental environmental projects and the Oil and Gas Remediation Account can address orphan wells. In addition, the budget includes an additional $1 million for the orphan well remediation at the Administration’s request.
Locations of supplemental environmental projects may vary from the site of the violation. Supplemental environmental projects are not required to be co-located with the well or facility subject to the civil penalty.
All oil and gas well remediation will not be completed by January 1, 2021. However, a sunset date for the new Oil and Gas Remediation Account will allow for the new Account to be evaluated.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
Department of Conservation (source)
Alliance of Nurses for Healthy Environment
California Interfaith Power and Light
California League of Conservation Voters
Center for Environmental Health
City of Los Angeles
Clean Water Action
Environmental Defense Fund
Environmental Working Group
Mainstreet Moms
Sierra Club California
None received
ARGUMENTS IN SUPPORT: According to the author, “[the division] is responsible for regulating the State’s oil and gas operations and investigating potential violations of statute and regulations. This bill would enhance the department’s authority to regulate the oil and gas industry and protect public health and the environment. Specifically, this bill:
- Enhances the division’s penalty authority to ensure that penalties assessed reflect the severity of the violation and serve as an adequate deterrent to violations.
- Allows up to half of penalty revenue to be spent on environmentally beneficial projects in communities impacted by oil and gas development.
- Creates a new account for civil penalties that will be used to remediate environmental contamination associated with oil and gas production where a responsible party cannot be identified or is insolvent.
- Authorizes the division to immediately shut-in injection projects that pose a risk to groundwater.
- Strengthens the division’s investigative authorities to collect information about proposed and ongoing oil and gas projects, and secure witness testimony during investigative hearings.”
ASSEMBLY FLOOR: 64-13, 6/2/16
AYES: Achadjian, Alejo, Arambula, Atkins, Baker, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández, Holden, Irwin, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, McCarty, Medina, Mullin, Nazarian, O'Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Wilk, Williams, Wood, Rendon
NOES: Travis Allen, Bigelow, Brough, Chávez, Beth Gaines, Harper, Jones, Melendez, Obernolte, Patterson, Steinorth, Wagner, Waldron
NO VOTE RECORDED: Chang, Dahle, Mayes
8/3/16 18:21:28
**** END ****
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
Bill No: AB 2756 (Author:Thurmond)
Version: June 1, 2016
Hearing Date: June 28, 2016
Fiscal: Yes
Urgency: No
Consultant: TH
SUBJECT
Oil And Gas Operations: Enforcement Actions
DESCRIPTION
This bill significantly revises the current penalty structure for assessing civil penalties against operators of oil, gas, and geothermal wells. Among other things, this bill authorizes the Division of Oil, Gas, and Geothermal Resources (DOGGR) to distinguish between major and minor violations, to assess penalties for violations on a per day basis, and to allow violators to complete supplemental environmental projects in lieu of paying assessed penalties. This bill also makes certain changes to provisions governing discovery in the context of an informal hearing before the Director of DOGGR, and makes changes to the procedures governing an informal hearing before the Director.
BACKGROUND
The Division of Oil, Gas, and Geothermal Resources (DOGGR), part of the Department of Conservation, is headed by the State Oil and Gas Supervisor. The Supervisor oversees the drilling, operation, maintenance, and removal or abandonment of tanks, facilities, wells, and certain pipelines. Upon determination that a violation of oil and gas regulations has occurred, the supervisor may impose a civil penalty of up to $25,000 for each violation. Operators may appeal the orders of a supervisor through an administrative appeals process, and may seek judicial review of the administrative decision.
This bill would allow the Supervisor to consider additional factors in setting a civil penalty for a violation of laws and regulations committed by operators of oil, gas, and geothermal wells, and would allow the Supervisor to classify a violation as either “major” or “minor,” depending on the nature of the violation, and would specify civil penalty limits for each category. This bill additionally authorizes the Supervisor to allow a violator to complete a “supplemental environmental project,” which is simply an environmentally beneficial project, in lieu of paying up to 50 percent of the civil penalty amount.
This bill also makes certain changes to the procedures related to appealing civil penalty assessments imposed by the Supervisor to the Director of Conservation. Among other things, this bill revises exceptions for when a notice of appeal operates as a stay of an order; revises what costs will be refunded if an emergency order is set aside or modified on appeal; and revises the circumstances in which appeals are to be heard in a formal hearing process before an administrative law judge, instead of in an informal hearing before the director. This bill authorizes the director to extend the date of a hearing for good cause, revises the authorization for the hearing to be electronically recorded, revises the timeline in which the director is required to grant or deny a petition to order the testimony of a witness at the hearing, and provides that obtaining subpoenas may be considered good cause to extend the date of the hearing. Additionally, this bill makes certain changes to discovery rules in the context of an informal hearing before the director, and prohibits the division and the department from making available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status, or other confidential or privileged information, when requested by the owner or operator furnishing the report.
CHANGES TO EXISTING LAW
- Existing law establishes the Division of Oil, Gas, and Geothermal Resources (DOGGR) in the Department of Conservation for purposes of regulating the operation of oil, gas, and geothermal wells, as specified. (Pub. Res. Code Sec. 3000 et seq.)
Existing law requires the State Oil and Gas Supervisor (Supervisor) to supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities attendant to oil and gas production, so as to prevent, as far as possible, damage to life, health, property, and natural resources, as specified. (Pub. Res. Code Sec. 3106.)
Existing law provides that a person who violates regulations for the operation of oil and gas wells is subject to a civil penalty not to exceed $25,000 for each violation, and a person who violates specified provisions related to well stimulation treatment is subject to a civil penalty of not less than $10,000 and not to exceed $25,000 per day per violation. Existing law states that the Supervisor shall consider, in addition to other relevant circumstances, all of the following when establishing the amount of the civil penalty:
- the extent of harm caused by the violation;
- the persistence of the violation;
- the pervasiveness of the violation; and
- the number of prior violations by the same violator. (Pub. Res. Code Sec. 3236.5.)
This bill additionally authorizes the Supervisor to consider the following when establishing the amount of the civil penalty:
- the degree of culpability of the violator;
- any economic benefit to the violator resulting from the violation;
- the violator’s ability to pay the civil penalty amount, as determined based on information publicly available to the division; and
- the supervisor’s prosecution costs.
This bill authorizes the Supervisor to classify a violation as a “major violation” based on one or more of the following:
- a violation that results in harm to persons or property or presents a significant threat to human health or the environment;
- a knowing, willful, or intentional violation;
- a chronic violation or one that is committed by a recalcitrant violator; or
- a violation where the violator derived significant economic benefit, either by significantly reduced costs or a significant competitive advantage.
This bill specifies that the civil penalty amount for a major violation shall be not less than $2,500 and not more than $25,000 per violation.
This bill authorizes the Supervisor to classify a violation that is not a major violation as a “minor violation,” as specified. This bill specifies that the civil penalty amount for a minor violation shall be not more than $2,500 per violation.
This bill provides, at the Supervisor’s discretion, that each day a major or minor violation continues or is not cured may be treated as a separate violation.
This bill authorizes the Supervisor to permit completion of a supplemental environmental project in lieu of not more than 50 percent of the total civil penalty amount.
- Existing law provides that if an operator does not appeal an order from the Supervisor, if the operator does not timely seek judicial review of a decision affirming or modifying an order, or if the operator has timely sought and obtained judicial review and the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the Supervisor to impose on the operator for work performed by the Supervisor or the Supervisor’s agents shall constitute a state tax lien against the real and personal property of the operator, as specified. (Pub. Res. Code Sec. 3356.)
This bill provides that in addition to a state tax lien, the Supervisor may apply to the appropriate superior court for a clerk’s judgment. The application, which shall include a certified copy of the final agency order or decision, shall constitute a sufficient showing to warrant the issuance of the judgment. The court clerk shall enter the judgment immediately in conformity with the application. The judgment so entered shall have the same force and effect as, and shall be subject to all the provisions of law relating to, a judgment in a civil action, and may be enforced in the same manner as any other judgment of the court.
- Existing law provides that in any proceeding before the director, and in any proceeding instituted by the Supervisor for the purpose of enforcing or carrying out the provisions of this division, or for the purpose of holding an investigation to ascertain the condition of any well or wells complained of, or which in the opinion of the Supervisor may reasonably be presumed to be improperly located, drilled, operated, maintained, or conducted, the Supervisor and the director shall have the power to administer oaths and may apply to a judge of the superior court of the county in which the proceeding or investigation is pending for a subpoena for witnesses to attend the proceeding or investigation. Upon the application of the Supervisor or the director, the judge of the superior court shall issue a subpoena directing the witness to attend the proceeding or investigation, and such person shall be required to produce, when directed, all records, surveys, documents, books, or accounts in the witness’ custody or under the witness’ control, as specified. The Supervisor or the director may in such case cause the depositions of witnesses residing within or without the state to be taken in the manner prescribed by law for like depositions in civil actions, and may, upon application to a judge of the superior court of the county within which the proceeding or investigation is pending, obtain a subpoena compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at such places as the judge may designate. (Pub. Res. Code Sec. 3357.)
This bill additionally provides that in conducting a proceeding or investigation, the Supervisor or director may require an owner or operator to furnish, under penalty of perjury, technical or monitoring reports that the Supervisor or director requires, as specified.
This bill states that when requested by the owner or operator furnishing the report, neither the division nor the department shall make available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential status, or other confidential or privileged information. The division or department shall make that confidential or privileged information available to other public agencies as needed for regulatory purposes and in accordance with a written agreement with the other public agency regarding the sharing of the information.
This bill states that in conducting a proceeding or investigation, the Supervisor or director, or his or her inspector, may inspect the well site or production facilities of any owner or operator to ascertain whether the owner or operator is complying with the requirements of or authorized by this division. The inspection shall be made with the consent of the owner or operator or, if consent is withheld, with a warrant duly issued, but in the event of an emergency affecting the public health or safety, an inspection may be performed without consent or a warrant.
This bill makes further changes and clarifications to the hearings and appeals process conducted by the Division of Oil, Gas, and Geothermal Resources.
COMMENT
- Stated need for the bill
According to the author:
This bill would improve and clarify the Department of Conservation’s Division of Oil, Gas, and Geothermal Resources’ penalty and enforcement capabilities. First, the bill will ensure that penalties issued by the Division will serve as sufficient deterrents to those operators who may otherwise behave irresponsibly. Second, the bill allows for impacted communities to potentially benefit from penalty actions taken against violators by giving the Division specific authority to approve environmentally beneficial projects as part of the civil penalty settlement. Third, AB 2756 would ensure that injection wells that could potentially impact underground sources of drinking water can be shut-in without complicated hearing procedures. Fourth, it gives the Division some of the same investigative authorities as the Water Board during investigations about alleged violations. Finally, the bill clarifies and streamlines due process if an operator appeals the Supervisor’s order, such as in cases where penalties are appealed. Collectively, these are important changes that will better enable the Division to ensure that the state’s natural resources are extracted safely and responsibly.
- Enhanced investigatory and penalty assessment authority
This bill modifies several aspects of the Division of Oil, Gas, and Geothermal Resources’ existing penalty, enforcement, and investigatory capabilities. Among other things, this bill authorizes the Supervisor to assess penalties in-line with the harm they cause by creating a new penalty classification framework. This bill streamlines the appeals process within DOGGR by concentrating most appeal decisionmaking responsibility with the DOGGR’s director. This bill also gives the Division enhanced authority to subpoena information relevant to an ongoing investigation under the supervision of a superior court judge. Writing in support, the Environmental Defense Fund states:
AB 2756 . . . [would strengthen] the Division of Oil, Gas and Geothermal Resources’ (DOGGR) ability to regulate oil and gas operations by enhancing civil penalties, authorizing DOGGR to immediately plug any oil injection projects that pose a risk to groundwater, and allowing penalty revenue to be spent on environmentally beneficial projects. Furthermore, this bill enhances DOGGR’s ability to investigate potential violations by giving them authority to issue investigative orders.
Oil and gas production operations have the potential to create costs from significant environmental damage by polluting our air, water, and soil. This bill would give DOGGR explicit statutory authority to issue investigative orders and subpoenas during an investigation and would allow DOGGR to immediately stop injection projects that are believed to impact beneficial use waters.
Existing law also limits penalties and types of factors that can be considered for addressing most violations related to oil and gas production. AB 2756 would permit DOGGR, in determining the amount of [a] civil penalty, to consider the harm or potential harm, the degree of culpability, and the economic benefit gained by committing the violation and to issue penalties of up to $25,000 per violation per day until the violation has been remediated. Communities most burdened by oil and gas activities with directly benefit from enforcement actions through environmentally beneficial projects.
- Trade secrets
Under existing law, DOGGR is authorized to apply to a superior court judge for a subpoena of “records, surveys, documents, books, or accounts” in connection with enforcing or carrying out specified duties under the law, or for the purpose of holding an investigation to ascertain the condition of any well “which in the opinion of the supervisor may reasonably be presumed to be improperly located, drilled, operated, maintained, or conducted.” (Pub. Res. Code Sec. 3357.) This bill modifies that subpoena authority by authorizing the Director or Supervisor, under the supervision of a judge, to directly issue subpoenas during certain investigations. It also provides that in conducting specified proceedings and investigations, Supervisor or Director “may require an owner or operator to furnish, under penalty of perjury, technical or monitoring reports,” and further provides that “[w]hen requested by the owner or operator furnishing the report, neither the division nor the department shall make available to the public for inspection portions of a report that might disclose trade secrets, well data granted confidential . . . , or other confidential or privileged information.”
This section appears to provide owners and operators of oil, gas, and geothermal wells with some role – the extent of which is unclear – in designating information in a report as a trade secret, confidential, or privileged, and therefore not subject to public release. Generally speaking, California, like many other states, affords protection to trade secrets not because they are property interests deserving of protection, but instead because commercial ethics impose a general duty of good faith on those to whom trade secret information is disclosed. (See Kewanee Oil Co v. Bicron Corp. (1974) 416 U.S. 470, 481 [“The maintenance of standards of commercial ethics and the encouragement of invention are the broadly stated policies behind trade secret law.”].) Protection of trade secrets, like protection given to other confidential or sensitive information shared with a regulator during the course of an investigation, helps establish a trusted pathway between parties to exchange information. However, the protected status given to sensitive information in such arrangements can be misused by parties who seek to prevent the disclosure of damaging or embarrassing information by falsely claiming such information to be a trade secret or otherwise privileged. Given the potential for misuse of trade secret protections by parties seeking to shield information from disclosure, and given the public’s broad interest in having access to information held by state agencies, the Committee may wish to consider whether sufficient safeguards exist to ensure that regulators – not regulated parties – make the determination as to whether privilege claims are warranted, and whether sufficient procedures and protocols are in place at DOGGR to evaluate whether information submitted by a regulated party should or should not be protected from public disclosure.
Support: Environmental Defense Fund
Opposition: None Known
HISTORY
Source: Department of Conservation
Related Pending Legislation:
AB 1882 (Williams, 2016) requires the State Water Resources Control Board, or the appropriate regional water quality control board to review and concur with any Underground Injection Control project subject to review or approval, and allows these boards to propose additional requirements for a project, including groundwater monitoring. This bill is in the Assembly Appropriations Committee.
AB 2729 (Williams, 2016) revises idle oil and gas well requirements, fees, and indemnity bonds imposed by the Division of Oil, Gas and Geothermal Resources, in order to create a financial incentive for operators to properly plug, rather than idle, low performing wells. This bill is in the Senate Committee on Natural Resources and Water.
SB 248 (Pavley, 2015) requires the Division of Oil, Gas, and Geothermal Resources to update and revise its regulations, develop a data management system, and enhance required reporting. This bill also prohibits the use of injection chemicals, unless DOGGR has complete information about specified properties and potential groundwater impacts, and prohibits disposal of water or wastewater associated with oil or gas exploration, development or production into oil sumps. This bill is in the Assembly Appropriations Committee.
Prior Legislation: AB 2453 (Tran, Ch. 264, Stats. 2010) clarified the judicial standard of review for an enforcement action of the State Oil and Gas Supervisor, and expanded procedural safeguards for an administrative appeal of an enforcement action, including the use of the Office of Administrative Hearings.
Prior Vote:
Senate Natural Resources and Water Committee (Ayes 7, Noes 1)
Assembly Floor (Ayes 64, Noes 13)
Assembly Appropriations Committee (Ayes 14, Noes 6)
Assembly Judiciary Committee (Ayes 7, Noes 2)
Assembly Natural Resources Committee (Ayes 7, Noes 2)
**************
SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
Senator Fran Pavley, Chair
2015 - 2016 Regular
Bill No: AB 2756 Hearing Date: June 14, 2016
Author: | |||
Version: |
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Urgency: | Fiscal: | ||
Consultant: | |||
Subject: Oil and gas operations: enforcement actions
BACKGROUND AND EXISTING LAW
- Existing law establishes the Division of Oil, Gas and Geothermal Resources (Division), the state’s oil and gas regulator, within the Department of Conservation (Department). The department is led by its Director (director), and the state oil and gas supervisor (supervisor) leads the division. Each of the division’s six statutory districts is led by a district deputy.
- Existing law requires the division to regulate the drilling, operation, maintenance, and abandonment of oil and gas wells in the state.
- Existing law provides that a person who violated certain requirements related to the regulation of oil and gas is subject to a civil penalty not to exceed $25,000 per violation, although violations of well stimulation treatment statute are subject to civil penalties of $10,000 - $25,000 per violation per day.
- Existing law requires the supervisor to consider specified circumstances when establishing the amount of the civil penalty.
- Existing law establishes procedures for an operator of a well or production facility to appeal an order by the supervisor or a district deputy to the director. A notice of the appeal must be filed with the supervisor or the district deputy who issued the order.
- Existing law establishes the Acute Orphan Well program and the Acute Orphan Well Account. An “acute orphan well” is a well that the supervisor determines could pose an immediate danger to life, health, or natural resources and there is no operator responsible or able to respond. The account is used, upon appropriation, to plug, abandon, and further secure an acute orphan well, as specified. The dedicated fee to support this account is expired and the Acute Orphan Well program is largely defunct. Existing law also allows the division to spend up to $1 million annually to address certain hazardous and idle-deserted wells, as defined, including orphan wells.
- Existing law sets forth numerous provisions governing discovery in the context of an informal hearing before the director. The supervisor or the director, upon application to a judge of the superior court of the county within which the proceeding or investigation is pending, is authorized to obtain a subpoena compelling the attendance of witnesses and the production of records, surveys, documents, books, or accounts at such places as the judge may designate within the limits prescribed in these provisions.
- Existing law provides that if the operator does not appeal an order, seek judicial review of a decision affirming or modifying an order within the time provided in law, or if the court has affirmed the decision, then any charge, including penalty and interest, that the decision permits the supervisor to impose constitutes a state tax lien against the real and personal property of the operator.
PROPOSED LAW
This bill would substantially revise the division’s civil penalty structure and procedures for appeal of an order issued to an oil and gas operator by the supervisor or district deputy.
Specifically this bill would:
- Require the supervisor to consider certain additional factors including, for example, any economic benefit to the violator from the violation, among others, relevant to determining whether a civil penalty shall be assessed and its amount.
- Establish both “major” and “minor” violations, as specified, separate from the existing well stimulation treatment penalty structure which is retained. At the supervisor’s discretion, each day a violation continues may be treated as a separate violation.
- A major violation must meet one or more specified criteria, such as, for example, harming persons or property, being willful, providing significant competitive advantage to the operator or being by a recalcitrant operator, among other things. A major violation shall be assessed at $2,500 to $25,000 per violation.
- A minor violation does not meet the criteria for a major violation and is assessed at not more than $2,500 per violation.
- Establish an Oil and Gas Remediation Account to receive civil penalties that are not used for supplemental environmental projects. This account sunsets on January 1, 2021 and thereafter funds shall be deposited in the existing Oil and Gas Administrative Fund.
- The supervisor may allow an operator to perform a supplemental environmental project to offset up to 50% of a civil penalty. A supplemental environmental project is an “environmentally beneficial project” that a person subject to an order of the supervisor imposing a civil penalty voluntarily agrees to undertake, as specified.
- The Oil and Gas Remediation Account shall fund, upon appropriation by the Legislature, actions by the division to plug and abandon oil and gas wells, decommission attendant facilities or otherwise remediate sites that the supervisor determines could pose a danger, as specified, if there is no operator available to do the work.
- The Oil and Gas Remediation Account replaces the Acute Orphan Well Program which is repealed.
- Make numerous changes to the appeal process and procedures. Among other things, these include:
- The notice of appeal is filed with the director.
- Exceptions for when the notice of appeal operates as a stay of the order are revised.
- Refundable costs are revised, as specified, in the event an emergency order is set aside or overturned on appeal.
- The circumstances are revised, as specified, in which appeals are heard in a formal hearing process before an administrative law judge instead of before the director in an informal hearing process.
- Authorize the supervisor to apply, for penalties due to uncontested or affirmed orders, as specified, to the appropriate superior court for a clerk’s judgement in order to provide an additional enforcement mechanism, as specified.
- Revise existing procedures and processes to the existing discovery process. Among other provisions, these include:
- A judge of the superior court, upon application by the supervisor or director, is required to assign a case number for the proceeding or investigation, to issue an order prescribing the nature and scope of the proceeding or investigation, and to retain jurisdiction for the limited purpose of enforcing subpoenas issued in the proceeding or investigation.
- The attorney of record for the supervisor or director is authorized to issue subpoenas compelling the attendance of witnesses and the production of certain records, as specified.
- The supervisor, director, or certain inspector is authorized to inspect the well site or production facility to ascertain whether certain requirements are being met, as specified.
- The supervisor or director is authorized to require the owner or operator to provide certain technical reports, as specified.
- The division and the department are required to keep certain confidential material, as specified, from public release.
ARGUMENTS IN SUPPORT
According to the author, “[the division] is responsible for regulating the State’s oil and gas operations and investigating potential violations of statute and regulations. This bill would enhance the department’s authority to regulate the oil and gas industry and protect public health and the environment. Specifically, this bill:
- Enhances the division’s penalty authority to ensure that penalties assessed reflect the severity of the violation and serve as an adequate deterrent to violations.
- Allows up to half of penalty revenue to be spent on environmentally beneficial projects in communities impacted by oil and gas development.
- Creates a new account for civil penalties that will be used to remediate environmental contamination associated with oil and gas production where a responsible party cannot be identified or is insolvent.
- Authorizes the division to immediately shut-in injection projects that pose a risk to groundwater.
- Strengthens the division’s investigative authorities to collect information about proposed and ongoing oil and gas projects, and secure witness testimony during investigative hearings.”
ARGUMENTS IN OPPOSITION
None received
COMMENTS
This bill is double-referred to the Senate Judiciary Committee. Elements of the bill subject to that Committee’s jurisdiction will be discussed there and are included here for completeness and context only.
Well stimulation treatment violations. SB 4 (Pavley, c. 313, Statutes of 2013) requires daily assessment of violations of well stimulation treatment statute and regulation. This bill would allow both major and minor violations of other oil and gas statutes and regulations to be assessed on a daily basis, at the supervisor’s discretion. The author may wish to consider whether it is appropriate for minor violations of well stimulation treatment statutes and regulations to be subject to a different penalty structure than currently required.
The division has existing and ongoing programs that address orphan wells. While the bill repeals the largely defunct Acute Orphan Well program language, supplemental environmental projects and the Oil and Gas Remediation Account can address orphan wells. In addition, the pending budget includes an additional $1 million for the orphan well remediation (proposed by the Administration in a spring budget change proposal).
Locations of supplemental environmental projects may vary from the site of the violation. Supplemental environmental projects are not required to be co-located with the well or facility subject to the civil penalty.
All oil and gas well remediation will not be completed by January 1, 2021. However, a sunset date for the new Oil and Gas Remediation Account will allow for the new Account to be evaluated.
Recent related legislation
AB 1882 (Williams, 2016) would require the Water Boards to review and concur with any Underground Injection Control project subject to review or approval, among other provisions. (This bill was held on suspense in Assembly Appropriations Committee.)
AB 2729 (Williams, 2016) would create disincentives for oil and gas well operators to maintain large idle well inventories, ensure that funds are available to plug and abandon idle wells in the event that they are deserted, and help improve public perception of oil and gas operations. (This bill will be heard by this Committee at its next hearing.)
SB 248 (Pavley, 2015) would require the division to review and update its regulations, data management practices, and enhance required reporting, prohibit the use of oil sumps after July 1, 2017, and allow the use of chemicals in oil and gas operations only if complete information about specified properties is known, among other provisions. (This bill is in the Assembly Appropriations Committee.)
SB 4 (Pavley, c. 313, Statutes of 2013) established a comprehensive regulatory program for oil and gas well stimulation treatments.
AB 2453 (Tran, c. 264, Statutes of 2010) modified the appeals process at the division to clarify that the judicial review of an appealed order be based on the “substantial evidence” standard of review. This bill shifted certain appeals from an informal hearing to a formal hearing, including appeals of plug and abandon orders or other actions such as rescission of an injection project approval. This bill clarified that when an order for remedial work, or a cease-and-desist order is issued under emergency circumstances, the order would not be stayed by the filing of an appeal, but rather, providing for an expedited hearing before the director. The bill required the division to reimburse the operator for required work if an order is invalidated on appeal.
AB 1960 (Nava, c. 562, Statutes of 2008) substantially strengthened and clarified the division’s authority to regulate oil and gas production facilities. This bill imposed additional requirements on operators to minimize frequency and severity of oil spills, and authorized the division to impose life-of-well and life-of-facility bonding on operators under specified circumstances. This bill also increased maximum penalties that the division may impose from $5,000 to $25,000 per violation.
SUPPORT
Department of Conservation (sponsor)
Alliance of Nurses for Healthy Environment
California Interfaith Power and Light
California League of Conservation Voters
Center for Environmental Health
City of Los Angeles
Clean Water Action
Environmental Defense Fund
Environmental Working Group
Mainstreet Moms
Sierra Club California
OPPOSITION
None Received
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:AB 2756
Author:(Thurmond and Williams)
As Amended Ver:June 1, 2016
Majority vote
Committee | Votes | Ayes | Noes |
Natural Resources | 7-2 | Williams, Cristina Garcia, Gomez, Hadley, McCarty, Mark Stone, Wood | Jones, Harper |
Judiciary | 7-2 | Mark Stone, Alejo, Chau, Chiu, Cristina Garcia, Holden, Ting | Gallagher, Maienschein |
Appropriations | 14-6 | Gonzalez, Bloom, Bonilla, Bonta, Calderon, Daly, Eggman, Eduardo Garcia, Roger Hernández, Holden, Quirk, Santiago, Weber, Wood | Bigelow, Patterson, Gallagher, Jones, Obernolte, Wagner |
SUMMARY: Enhances the Division of Oil, Gas, and Geothermal Resources' (DOGGR) penalty, shut-in order, and investigation authority. Authorizes DOGGR to permit environmentally beneficial projects in lieu of up to 50% of the amount of a civil penalty. Specifically, this bill:
- Specifies that, at the Supervisor's discretion, each day a violation continues it may be treated as a separate violation. Establishes different tiers of civil penalties including minor and major violations.
- Authorizes DOGGR to permit environmentally beneficial projects in lieu of up to 50% of the civil penalty amount. Requires, until January 1, 2021, civil penalties to be deposited into the newly created Oil and Gas Environmental Remediation Account rather than the Oil, Gas, and Geothermal Account.
- Specifies when an emergency order for testing or remedial work is set aside or modified on appeal, only the cost of work performed is required to be refunded by DOGGR. Prohibits reimbursement for lost profits or increased production costs.
- Modifies requirements for appeals and for emergency orders hearings.
- Allows the Supervisor to impose a state tax lien against the real and personal property of the operator for civil penalties assessed by DOGGR.
- Authorizes the Supervisor or Director to require an operator to furnish, under penalty of perjury, technical or monitoring reports that the Supervisor or Director requires.
- Authorizes the Department of Conservation (DOC) or DOGGR to inspect the well site or production facilities of any operator to ascertain whether the operator is complying with the requirements of the state's oil and gas laws or regulations. Specifies that inspection will be conducted with the consent of the operator or with a warrant. Authorizes DOC or DOGGR, in the event of an emergency affecting the public health or safety, to inspect a well site or production facilities without consent or a warrant.
EXISTING LAW:
- Requires the state's Oil and Gas Supervisor (Supervisor) to supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities attendant to oil and gas production.
- Provides that a person who violates state's oil and gas laws or regulations is subject to a civil penalty not to exceed $25,000 for each violation.
- Establishes procedures for an operator of a well or production facility to appeal to the Director of Conservation (Director) for an order of the Supervisor or a district deputy, including the following:
- Requires appeal to be filed within 10 days of the service of the order or waive its rights to challenge the order;
- Requires a notice of appeal to be filed with the Supervisor or with the district deputy who issued the order;
- Requires a written notice of appeal to operate as a stay of a shut-in order, except in the case of an emergency order, which require two hearings to issue; and,
- Requires the Supervisor to reimburse operators for their costs to perform remedial work or tests if the emergency order is set aside or modified.
- Allows the Supervisor to impose a state tax lien against the real and personal property of the operator for work performed by DOGGR.
- Provides the Supervisor and the Director with the power to administer oaths in an investigation and apply to a judge of the superior court of the county in which the proceeding or investigation is pending for subpoenas for witnesses to attend the proceeding or investigation.
FISCAL EFFECT: According to the Assembly Appropriations Committee, the costs of this bill are absorbable within existing DOGGR resources, potential minor savings resulting from changes in hearing procedures.
COMMENTS:
- Background. DOGGR was created in 1915 to supervise the drilling, operation, maintenance, and plugging and abandonment of onshore and offshore oil, gas, and geothermal wells. California is in the top five oil producing states in the country and produced over 200 million barrels of oil in 2014. There has been concern that DOGGR has had too much focus on protection of oil and gas resources in the state from production practices that could harm the ultimate level of hydrocarbon recovery. This focus has been at the cost of protection of groundwater, occupational safety, and public health. In October 2015, DOGGR released its "Renewal Plan for Oil and Gas Regulation", which outlines reforms DOGGR will undertake with the goal of having "an effective regulatory program that ensures the protection of public health and the environment in the oil fields of California." One issue DOGGR has identified as needing improvement is its enforcement of the state's oil and gas laws and regulations.
- Penalties. Current law allows DOGGR to assess between $10,000 and $25,000 per day for each violation for well stimulation, but only up to $25,000 per violation for other penalties. Unlike other agencies, such as California Environmental Protection Agency, DOGGR is not authorized as part of a penalty order to permit an operator to fund supplemental environmental projects (SEPs) to benefit impacted communities in lieu of a portion of their civil penalty amount. This has created issues for DOGGR's enforcement capabilities. In early 2014, a gas leak was detected beneath the community of Arvin, California. A total of eight families were evacuated from their homes and unable to return for several months. Affected residents smelled gas and complained of nosebleeds, headaches, coughing, and dizziness. DOGGR was only able to fine the operator, Petro Capital Recourses, $75,000 for three violations. This fine does not consider the severity of the violation such as it resulted in evacuations, illnesses, and environmental damage. The penalty does not act as deterrence, because it is not a significant amount of money for the company. In addition, the operator was prevented from conducting SEPs that could have helped reduce the impacts on the community of Arvin.
Another example is DOGGR recently issued a $75,000 civil penalty order to the Termo Company for three violations, because the company was illegally venting natural gas in the Aliso Canyon field. According to the penalty order, "once the pipeline was discovered, Operator destroyed the evidence of its existence before the division personnel could fully inspect it. The brazen nature of this violation shows that operator held little to no regard for the statutes and regulations or, more importantly, public health and safety." DOGGR is not able to take into account the intentionality of the violation or how many days it occurred when issuing penalty orders. This bill enhances DOGGR's penalty authority and allows SEPs for 50% of a total civil penalty. In addition, this bill creates a separate penalty account for four years that, upon appropriation, may be used by DOGGR to deal with clean up and orphan well issues.
Analysis Prepared by: Michael Jarred / NAT. RES. / (916) 319-2092 FN: 0003381
ASSEMBLY THIRD READING
ATR Bill Id:AB 2756
Author:(Thurmond and Williams)
As Amended Ver:May 11, 2016
Majority vote
Committee | Votes | Ayes | Noes |
Natural Resources | 7-2 | Williams, Cristina Garcia, Gomez, Hadley, McCarty, Mark Stone, Wood | Jones, Harper |
Judiciary | 7-2 | Mark Stone, Alejo, Chau, Chiu, Cristina Garcia, Holden, Ting | Gallagher, Maienschein |
Appropriations | 14-6 | Gonzalez, Bloom, Bonilla, Bonta, Calderon, Daly, Eggman, Eduardo Garcia, Roger Hernández, Holden, Quirk, Santiago, Weber, Wood | Bigelow, Patterson, Gallagher, Jones, Obernolte, Wagner |
SUMMARY: Enhances the Division of Oil, Gas, and Geothermal Resources' (DOGGR) penalty, shut-in order, and investigation authority. Authorizes DOGGR to permit environmentally beneficial projects in lieu of up to 50% of the amount of a civil penalty. Specifically, this bill:
- Specifies that, at the Supervisor's discretion, each day a violation continues it may be treated as a separate violation. Establishes different tiers of civil penalties including minor and major violations.
- Requires the operator to cease injection operations as soon as it is safe to do so when ordered to do so by DOGGR.
- Authorizes DOGGR to permit environmentally beneficial projects in lieu of up to 50% of the civil penalty amount. Requires civil penalties to be deposited into the newly created Oil and Gas Environmental Remediation Account rather than the Oil, Gas, and Geothermal Account.
- Specifies when an emergency order for testing or remedial work is set aside or modified on appeal, only the cost of remedial work performed is required to be refunded by DOGGR. Prohibits reimbursement for lost profits or increased production costs.
- Modifies requirements for appeals and for emergency orders hearings.
- Allows the Supervisor to impose a state tax lien against the real and personal property of the operator for civil penalties assessed by DOGGR.
- Authorizes the Supervisor or Director to require an operator to furnish, under penalty of perjury, technical or monitoring reports that the Supervisor or Director requires.
- Authorizes the Department of Conservation (DOC) or DOGGR to inspect the well site or production facilities of any operator to ascertain whether the operator is complying with the requirements of the state's oil and gas laws or regulations. Specifies that inspection will be conducted with the consent of the operator or with a warrant. Authorizes DOC or DOGGR, in the event of an emergency affecting the public health or safety, to inspect a well site or production facilities without consent or a warrant.
EXISTING LAW:
- Requires the state's Oil and Gas Supervisor (Supervisor) to supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities attendant to oil and gas production.
- Provides that a person who violates state's oil and gas laws or regulations is subject to a civil penalty not to exceed $25,000 for each violation.
- Establishes procedures for an operator of a well or production facility to appeal to the Director of Conservation (Director) for an order of the Supervisor or a district deputy, including the following:
- Requires appeal to be filed within 10 days of the service of the order or waive its rights to challenge the order;
- Requires a notice of appeal to be filed with the Supervisor or with the district deputy who issued the order;
- Requires a written notice of appeal to operate as a stay of a shut-in order, except in the case of an emergency order, which require two hearings to issue; and,
- Requires the Supervisor to reimburse operators for their costs to perform remedial work or tests if the emergency order is set aside or modified.
- Allows the Supervisor to impose a state tax lien against the real and personal property of the operator for work performed by DOGGR.
- Provides the Supervisor and the Director with the power to administer oaths in an investigation and apply to a judge of the superior court of the county in which the proceeding or investigation is pending for subpoenas for witnesses to attend the proceeding or investigation.
FISCAL EFFECT: According to the Assembly Appropriations Committee, the costs of this bill are absorbable within existing DOGGR resources, potential minor savings resulting from changes in hearing procedures.
COMMENTS:
- Background. DOGGR was created in 1915 to supervise the drilling, operation, maintenance, and plugging and abandonment of onshore and offshore oil, gas, and geothermal wells. California is in the top five oil producing states in the country and produced over 200 million barrels of oil in 2014. There has been concern that DOGGR has had too much focus on protection of oil and gas resources in the state from production practices that could harm the ultimate level of hydrocarbon recovery. This focus has been at the cost of protection of groundwater, occupational safety, and public health. In October 2015, DOGGR released its "Renewal Plan for Oil and Gas Regulation", which outlines reforms DOGGR will undertake with the goal of having "an effective regulatory program that ensures the protection of public health and the environment in the oil fields of California." One issue DOGGR has identified as needing improvement is its enforcement of the state's oil and gas laws and regulations.
- Penalties. Current law allows DOGGR to assess between $10,000 and $25,000 per day for each violation for well stimulation, but only up to $25,000 per violation for other penalties. Unlike other agencies, such as California Environmental Protection Agency, DOGGR is not authorized as part of a penalty order to permit an operator to fund supplemental environmental projects (SEPs) to benefit impacted communities in lieu of a portion of their civil penalty amount. This has created issues for DOGGR's enforcement capabilities. In early 2014, a gas leak was detected beneath the community of Arvin, California. A total of eight families were evacuated from their homes and unable to return for several months. Affected residents smelled gas and complained of nosebleeds, headaches, coughing, and dizziness. DOGGR was only able to fine the operator, Petro Capital Recourses, $75,000 for three violations. This fine does not consider the severity of the violation such as it resulted in evacuations, illnesses, and environmental damage. The penalty does not act as deterrence, because it is not a significant amount of money for the company. In addition, the operator was prevented from conducting SEPs that could have helped reduce the impacts on the community of Arvin.
Another example is DOGGR recently issued a $75,000 civil penalty order to the Termo Company for three violations, because the company was illegally venting natural gas in the Aliso Canyon field. According to the penalty order, "once the pipeline was discovered, Operator destroyed the evidence of its existence before the division personnel could fully inspect it. The brazen nature of this violation shows that operator held little to no regard for the statutes and regulations or, more importantly, public health and safety." DOGGR is not able to take into account the intentionality of the violation or how many days it occurred when issuing penalty orders. This bill enhances DOGGR's penalty authority and allows SEPs for 50% of a total civil penalty. In addition, this bill creates a separate penalty account that, upon appropriation, may be used by DOGGR to deal with clean up and orphan well issues.
Analysis Prepared by: Michael Jarred / NAT. RES. / (916) 319-2092 FN: 0003006
Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
ABPCA Bill Id:AB 2756
Author:(Thurmond) – As Amended Ver:May 11, 2016
Policy Committee: | Natural Resources | Vote: | 7 - 2 |
Judiciary | 7 - 2 | ||
|
|
Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill Enhances the Division of Oil, Gas, and Geothermal Resources’ (DOGGR) penalty, shut-in order, and investigation authority. This bill authorizes DOGGR to permit environmentally beneficial projects in lieu of up to 50% of the amount of a civil penalty.
- Requires the DOGGR Supervisor to consider additional circumstances, as specified when determining the amount of the civil penalty:
- Sets ranges of civil penalty amounts depending on whether the violation is a well stimulation a major violation , or a minor violation as follows:
- Not less than $10,000 or more than $25,000 per day per well-stimulation violation.
- Not less than $2,500 or more than $25,000 per major violation.
- Not more than $5,000 per minor violation.
The Supervisor has the discretion to treat each day of major and minor violation as a separate violation.
- Authorizes DOGGR to permit environmentally beneficial projects in lieu of up to 50% of the civil penalty amount.
- Creates the Oil and Gas Environmental Remediation Account and requires civil penalties to be deposited in the account to be appropriated by Legislature for specified remediation and well plugging projects.
- Revises the appeal, emergency order, and informal hearing process and procedures for operators to appeal an order from the DOGGR Supervisor to the Director of the Department of Conservation.
- Allows the DOGGR Supervisor to impose a state tax lien against the real property of the operator for civil penalties assessed.
FISCAL EFFECT:
The costs of this bill are absorbable within existing DOGGR resources, potential minor savings resulting from changes in hearing procedures.
COMMENTS:
- Rationale. DOGGR was created in 1915 to supervise the drilling, operation, maintenance, and plugging and abandonment of onshore and offshore oil, gas, and geothermal wells. California is in the top five oil producing states in the country and produced over 200 million barrels of oil in 2014.
In October 2015, DOGGR released its “Renewal Plan for Oil and Gas Regulation,” which outlines reforms DOGGR will undertake with the goal of having “an effective regulatory program that ensures the protection of public health and the environment in the oil fields of California.” One issue DOGGR has identified as needing improvement is its enforcement of the state’s oil and gas laws and regulations.
This bill enhances DOGGR’s penalty and enforcement authority and allows SEPs for 50% of a total civil penalty.
- Discussions Continue. The author, sponsor and representatives from the oil and gas industry have resolved many differences that are reflected in this version of the bill. However, all parties are continuing to work on provisions related to penalty enhancements and due process.
Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081
Date of Hearing: April 12, 2016
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
ABPCA Bill Id:AB 2756
Author:(Thurmond) – As Amended Ver:April 7, 2016
SUBJECT: Oil and gas operations: enforcement actions
KEY ISSUE: should the enforcement and investigatory powers of the division of Oil, Gas, and geothermal resources be increased, so as to increase the division's ability to deter environmentally harmful violations by oil and gas operations?
SYNOPSIS
The Division of Oil, Gas, and Geothermal Resources (DOGGR) – a division of the California Department of Conservation – regulates oil and gas production in the state. Specifically, DOGGR supervises the drilling, operation, maintenance, and plugging and abandonment of onshore and offshore oil, gas, and geothermal wells. While much of DOGGR's history has focused on balancing the productive use and conservation of these important natural resources, DOGGR has more recently turned its attention to issues of public health and environmental protection, as evidenced in an October, 2015 report of DOGGR. This bill aims to enhance the power of DOGGR to carry out its mission. To begin with, the bill enhances penalties. Whereas existing law allows DOGGR to impose penalties not to exceed $25,000 per violation, this bill would amend this penalty provision so that each day the violation continues constitutes a separate violation. In short, while existing law authorizes a penalty of $25,000 per violation, this bill authorizes a penalty of $25,000 per violation, per day. The author believes that these changes will ensure that penalties are "commensurate to violations." While the bill enhances the civil penalty, it at the same time authorizes DOGGR to offer the violator the opportunity to undertake a "supplemental environmental project" (SEP). This would allow a violator to voluntarily undertake a beneficial environmental project in exchange for offsetting up to 50% of the civil penalty. This bill also includes a number of other changes designed to enhance the power and efficiency of DOGGR. The changes proposed by this bill can be roughly grouped in the following categories: penalties; offsets for supplemental environmental projects; shut-in orders and stays pending appeal; investigatory powers; and hearing and appeal procedures. Each category is discussed more fully in the analysis. This bill is sponsored by the Department of Conservation and supported by environmental and public health groups. The bill is opposed by the Western States Petroleum Association. The bill recently passed out of the Assembly Natural Resources Committee on a 7-2 vote.
SUMMARY: Enhances the authority of the Division of Oil, Gas, and Geothermal Resources (DOGGR) to impose penalties, issue shut-in orders, and conduct hearings and investigations of oil and gas operations. Specifically, this bill:
- Provides that each day a violation continues it may be treated, at the discretion of the Supervisor of DOGGR, as a separate violation.
- Authorizes the Supervisor of DOGGR to consider the following conditions, as well as any other relevant conditions, when establishing the amount of the civil penalty:
- The extent of harm or potential harm caused by the violation;
- The persistence of the violation;
- The pervasiveness of the violation;
- The number of prior violations by the same violator;
- The degree of culpability of the violator;
- Any economic benefit to the violator resulting from the violation;
- The violator’s assets, liabilities, and net worth; and,
- The Supervisor’s prosecution costs.
- Requires the operator to cease injection operations as soon as it is safe to do so when ordered to do so by DOGGR.
- Authorizes DOGGR to permit environmentally beneficial projects in lieu of up to 50% of the civil penalty amount.
- Modifies requirements for appeals and for emergency order hearings and removes the option for either party to electronically record the hearing.
- Allows the Supervisor to impose a state tax lien against the real and personal property of the operator for civil penalties assessed by DOGGR.
- Authorizes the Supervisor or Director to require an operator to furnish, under penalty of perjury, technical or monitoring reports that the Supervisor or Director requires.
- Authorizes the Department of Conservation (DOC) or DOGGR to inspect the well site or production facilities of any operator to ascertain whether the operator is complying with the requirements of the state’s oil and gas laws or regulations. Specifies that inspection will be conducted with the consent of the operator or with a warrant. Authorizes DOC or DOGGR, in the event of an emergency affecting the public health or safety, to inspect a well site or production facilities without consent or a warrant.
- Requires civil penalties to be deposited in the Oil and Gas Environmental Remediation Fund to be used for specified remedial purposes.
EXISTING LAW:
- Requires the state’s Oil and Gas Supervisor (Supervisor) to supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities attendant to oil and gas production. (Public Resources Code Sections 3200-3228.)
- Provides that a person who violates the state’s oil and gas laws or regulations is subject to a civil penalty not to exceed $25,000 for each violation. Requires the Supervisor to consider specified circumstances when establishing the amount of the civil penalty such as the extent of harm caused by the violation, the persistence of the violation, the pervasiveness of the violation; and the number of prior violations by the same violator. (Section 3236.5.)
- Establishes procedures for an operator of a well or production facility to appeal to the Director of Conservation (Director) for an order of the Supervisor or a district deputy, including the following:
- Requires appeal to be filed within 10 days of the service of the order or waive its rights to challenge the order;
- Requires a notice of appeal to be filed with the Supervisor or with the district deputy who issued the order;
- Requires a written notice of appeal to operate as a stay of a shut-in order, except in the case of an emergency order, which require two hearings to issue; and,
- Requires the Supervisor to reimburse operators for their costs to perform remedial work or tests if the emergency order is set aside or modified. (Public Resources Code Sections 3250-3257.)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: California produced more than 200 barrels of oil in 2014, making it one of the top five oil-producing states in the nation. While oil and gas production makes a significant contribution to the state's economy, it can also create potential environmental harms, including harm to the state's precious groundwater supply. Since 1915, the Department of Conservation's Division of Oil, Gas, and Geothermal Resources (DOGGR) has supervised the drilling, operation, maintenance, and plugging and abandonment of onshore and offshore oil, gas, and geothermal wells. In October of 2015, DOGGR released a plan outlining a number of reforms that the division intends to take in order to protect public health and the environment in and around the state's oil fields. This bill is apparently intended to help in that project. According to the author, the purpose of this bill is to enhance DOGGR's authority to regulate the oil and gas industry. Most significant, the bill would allow DOGGR to issue penalties of $25,000 per day, per violation. In addition to the enhanced penalties, this bill also includes a number of other changes designed to enhance the regulatory and investigatory work of DOGGR. The changes proposed by this bill can be roughly grouped in the following categories: penalties; offsets for supplemental environmental projects; shut-in orders and stays pending appeal; investigatory powers; and procedural and due process concerns. Each category is discussed below.
Penalties: Under existing law, a person who violates regulations relating to oil and gas operations is subject to a civil penalty not to exceed $25,000 per violation. Existing law requires the Supervisor of DOGGR to consider a number of factors when setting the amount of a fine, but the penalty cannot exceed $25,000 no matter the seriousness of the violation, the degree of harm done, or the culpability of the operator. This bill would add to the list of existing considerations the following: the extent of the potential harm caused by the violation (not just the actual harm, as is in existing law); the economic benefit to the violator resulting from the violation; the violator's assets and liabilities, and the Supervisor's prosecution costs. Perhaps most significantly, while existing law permits a $25,000 penalty per violation, this bill would permit the Supervisor, at his or her discretion, to impose the penalty per violation per day, treating each day that the violation continues as a separate violation. The penalty for this per day violation cannot be less than $10,000 per day. As under existing law, the penalty imposed by the DOGGR Supervisor constitutes a tax lien. Finally, as most recently amended, the enhanced civil penalties assessed under this bill shall be deposited in the Oil and Gas Environmental Remediation Account, to be used for specified purposes, including conducting remedial work on sites that could pose a danger to life, health, water quality, wildlife, or natural resources.
Offsets for Supplemental Environmental Projects: While the civil penalties would be significantly enhanced by this bill, especially where the violation is on-going, at the same time the Supervisor would be authorized, again at his or her discretion, to offer the violator the opportunity to undertake a Supplemental Environmental Project (SEP) – that is, some project that has a beneficial or restorative environmental effect on the affected area or community – in exchange for up to a 50% reduction in the civil penalty. According to the author, SEPs will allow the affected communities to benefit by making environmentally beneficial projects a part of the civil penalty settlement.
Shut-in Orders and Stays Pending Appeal: Under existing law, DOGGR has the authority to issue so-called "shut-in" orders that call upon the operator to cease and desist the operation of "injection wells," which can have an adverse impact on groundwater aquifers. Under existing law, when an operator files an appeal, the appeal operates as a stay on the cease and desist order, and the potentially harmful injections continue. The only time the order is not stayed by an appeal is when the order qualifies as an "emergency" order. However, under this bill, a cease and desist order against injections – that is, a "shut-in" order – will not be automatically stayed by the appeal.
Investigatory Powers: The bill makes a number of procedural and substantive changes that enhance DOGGR's ability to conduct investigations and discover violations. Among the more important changes are those granting DOGGR subpoena power that is similar to what other agencies, including the State Water Board, already possess. This enhanced subpoena power may not be as great as opponents of the bill fear. According to the California Department of Conservation – the sponsor of this bill – any attorney (including attorneys for DOGGR) has the power to obtain a subpoena. Another important investigatory tool that this bill would grant to DOGGR is the power to conduct investigations of oil and gas operations without a warrant in an emergency situation. However, this power to conduct warrantless inspections is only justified where there is "an emergency affecting the public health or safety," which appears consistent with other areas of law in which warrantless searches are permitted under judicially defined "exigent circumstances."
Procedural Changes and Due Process Concerns: This bill implements a number of procedural changes that, according to the author, streamline the process for hearings and appeals, but, according to the Western States Petroleum Association, amount to a denial of due process. As noted above, one of these procedural changes provides that, in the case of a cease and desist order against injection wells, the appeal will no longer operate as a stay on the order. However, the author and supporters of this bill reasonably justify this change by noting that it is necessary to stop irreparable damage that may result from the injection process. If the order is stayed, it may be impossible to undo the damage. The bill provides that if an order is later set aside, the DOGGR Supervisor must refund any reasonable costs incurred by the operator during an emergency shut down. The bill makes a number of other seemingly reasonable changes to the process and procedures for an informal hearing. For example, the bill authorizes DOGGR to extend the date of the hearing for good cause shown; removes a provision that authorized the hearing to be electronically recorded by either party; revises the timeline in which DOGGR may grant or deny a petition to hear the testimony of a witness; and provides that the obtaining of subpoenas may be considered good cause to extend the date of the hearing. Finally, in conducting a proceeding or investigation, the supervisor or director may require the operator, under penalty of perjury, to furnish specified technical and monitoring reports, so long as DOGGR identifies the evidence that supports requiring the reports.
ARGUMENTS IN SUPPORT: According to the author, this bill will increase the powers of DOGGR in the following ways:
First, the bill will ensure that penalties issued by the Division will serve as sufficient deterrents to those operators who may otherwise behave irresponsibly.
Second, the bill allows for impacted communities to potentially benefit from penalty actions taken against violators by giving the Division specific authority to approve environmentally beneficial projects as part of the civil penalty settlement.
Third, AB 2756 would ensure that injection wells that could potentially impact underground sources of drinking water can be shut-in without complicated hearing procedures.
Fourth, it gives the Division some of the same investigative authorities as the Water Board during investigations about alleged violations.
Finally, the bill clarifies and streamlines due process if an operator appeals the Supervisor’s order, such as in cases where penalties are appealed. Collectively, these are important changes that will better enable the Division to ensure that the state’s natural resources are extracted safely and responsibly.
The Environmental Defense Fund (EDF) supports this bill because it will allow revenue collected from civil penalties to be spent on environmentally beneficial projects, and that it will enhance the division's "ability to investigate potential violations by giving them authority to issue investigatory orders." EDF argues that oil and gas operations "have the potential to cause significant environmental damage by polluting our air, water, and soil." EDF contends that this bill gives DOGGR the authority to "issue investigative orders and subpoenas during an investigation and would allow DOGGR to immediately stop injection projects" that impact water. The problem with existing law, according to EDF, is that it "limits penalties and types of factors that can be considered for addressing most violations related to oil and gas production." This bill, on the other hand, would permit DOGGR, when determining the proper amount of a civil penalty, "to consider harm, or potential harm, the degree of culpability, and the economic benefit gained by committing the violation" and to issue penalties of $25,000 per day until the violation has been remedied.
ARGUMENTS IN OPPOSITION: The Western States Petroleum Association (WSPA) opposes this bill unless amended to "give the Supervisor of [DOGGR] more discretion over the assessment of penalties." WSPA writes that while it recognizes that the intent of the bill is to reflect the gravity of the violation, it contends that "AB 2756 contains several concerning provisions that would prevent operators from obtaining proper due process in cases where they may be facing penalties for violations of the Public Resources Code." WSPA notes in particular that while existing law gives the DOGGR Supervisor discretion to asses a civil penalty of not more than $25,000 for a violation, "AB 2756 would allow the DOGGR Supervisor to issue penalties of up to $25,000 per violation per day until the violation has been remedied, regardless of the severity of the violation." WSPA also notes that under existing law a civil penalty imposed by DOGGR is treated as a state tax lien and enforceable in superior court; however, this bill allows the Supervisor to apply to the superior court for a clerk's judgment which would be immediately enforceable without a hearing. WSPA claims that the changes proposed by this bill do not provide any certainty to the operator "that the amount of the civil penalty will be reasonably commensurate with the severity of the violation." Finally, WSPA believes that the Supervisor's expanded power to subpoena evidence, as provided in this bill, "removes any evidentiary protections provided by statute or common law. In essence, it's possible the bill could abrogate the attorney-client privilege without providing due process." WSPA's proposed amendments would create different categories of violations with corresponding maximum penalties and proposes other changes that it believes will ensure sufficient due process.
Related Prior Legislation. AB 1882 (Williams, 2016) requires the State Water Resources Control Board (SWRCB) or appropriate regional water quality control board (RWQCB) to review and concur with any Underground Injection Control (UIC) project subject to review or approval. This bill allows SWRCB or the appropriate RWQCB to propose additional requirements for a project, including groundwater monitoring.
AB 2729 (Williams, 2016) creates disincentives for operators to maintain large idle well inventories, will ensure that funds are available to plug and abandon idle wells in the event that they are deserted, and will help improve public perception of oil and gas operations.
SB 248 (Pavley, 2015) requires DOGGR to review and update its regulations, data management practices, and enhance required reporting. This bill prohibits the use of oil sumps after July 1, 2017. This bill also prohibits injection chemicals, unless DOGGR has complete information about specified properties and potential groundwater impacts.
SB 4 (Pavley), Chapter 313, Statutes of 2013, established a comprehensive regulatory program for oil and gas well stimulation treatments, which includes, among other things, a study, the development of regulations, a permitting process, and public notification and disclosure. This bill also required DOGGR to assess between $25,000 and $10,000 per day that a violation related to well stimulation occurred.
AB 2453 (Tran, Chapter 264, Statutes of 2010) modified the appeals process at DOGGR to clarify that the judicial review of an appealed order be based on the “substantial evidence” standard of review, shifted certain appeals from an informal hearing to a formal hearing, and made other changes relating the issuance of DOGGR orders.
AB 1960 (Nava, Chapter 562, Statutes of 2008) substantially strengthened and clarified DOGGR’s authority to regulate oil and gas production facilities, imposed additional requirements on operators to minimize frequency and severity of oil spills, and authorized DOGGR to impose life-of-well and life-of-facility bonding on operators under specified circumstances. The bill also increased maximum penalties that DOGGR could impose from $5,000 to $25,000 per violation.
REGISTERED SUPPORT / OPPOSITION:
Support
Department of Conservation (sponsor)
Alliance for Nurses for Healthy Environments
California Interfaith Power and Light
California League of Conservation Voters
Center for Environmental Health
Clean Water Action California
Environmental Defense Fund
Mainstreet Moms
Opposition
Western States Petroleum Association (unless amended)
Analysis Prepared by: Thomas Clark / JUD. / (916) 319-2334
Date of Hearing: April 4, 2016
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Das Williams, Chair
ABPCA Bill Id:AB 2756 (
Author:Thurmond) – As Introduced Ver:February 19, 2016
SUBJECT: Oil and gas operations: enforcement actions
SUMMARY: Enhances the Division of Oil, Gas, and Geothermal Resources’ (DOGGR) penalty, shut-in order, and investigation authority. Authorizes DOGGR to permit environmentally beneficial projects in lieu of up to 50% of the amount of a civil penalty.
EXISTING LAW:
- Requires the state’s Oil and Gas Supervisor (Supervisor) to supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities attendant to oil and gas production.
- Provides that a person who violates state’s oil and gas laws or regulations is subject to a civil penalty not to exceed $25,000 for each violation. Requires Supervisor to consider specified circumstances when establishing the amount of the civil penalty such as:
- The extent of harm caused by the violation;
- The persistence of the violation;
- The pervasiveness of the violation; and,
- The number of prior violations by the same violator.
- Establishes procedures for an operator of a well or production facility to appeal to the Director of Conservation (Director) for an order of the Supervisor or a district deputy, including the following:
- Requires appeal to be filed within 10 days of the service of the order or waive its rights to challenge the order;
- Requires a notice of appeal to be filed with the Supervisor or with the district deputy who issued the order;
- Requires a written notice of appeal to operate as a stay of a shut-in order, except in the case of an emergency order, which require two hearings to issue; and,
- Requires the Supervisor to reimburse operators for their costs to perform remedial work or tests if the emergency order is set aside or modified.
- Allows the Supervisor to impose a state tax lien against the real and personal property of the operator for work performed by DOGRR.
- Provides the Supervisor and the Director with the power to administer oaths in an investigation and apply to a judge of the superior court of the county in which the proceeding or investigation is pending for subpoenas for witnesses to attend the proceeding or investigation.
THIS BILL:
- Specifies that, at the Supervisor’s discretion, each day a violation continues it may be treated as a separate violation.
- Rather than requiring specified circumstances that the Supervisor must consider, this bill, instead, permits the Supervisor to consider the following conditions when establishing the amount of the civil penalty:
- The extent of harm or potential harm caused by the violation;
- The persistence of the violation;
- The pervasiveness of the violation;
- The number of prior violations by the same violator;
- The degree of culpability of the violator;
- Any economic benefit to the violator resulting from the violation;
- The violator’s assets, liabilities, and net worth; and,
- The Supervisor’s prosecution costs.
- Requires the operator to cease injection operations as soon as it is safe to do so when ordered to do so by DOGGR.
- Authorizes DOGGR to permit environmentally beneficial projects in lieu of up to 50% of the civil penalty amount.
- Specifies when an emergency order for testing or remedial work is set aside or modified on appeal, only the cost of remedial work performed is required to be refunded by DOGGR. Prohibits reimbursement for lost profits or increased production costs.
- Modifies requirements for appeals and for emergency orders hearings. Removes the option for either party to electronically record the hearing.
- Allows the Supervisor to impose a state tax lien against the real and personal property of the operator for civil penalties assessed by DOGRR.
- Authorizes the Supervisor or Director to require an operator to furnish, under penalty of perjury, technical or monitoring reports that the Supervisor or Director requires.
- Authorizes the Department of Conservation (DOC) or DOGGR to inspect the well site or production facilities of any operator to ascertain whether the operator is complying with the requirements of the state’s oil and gas laws or regulations. Specifies that inspection will be conducted with the consent of the operator or with a warrant. Authorizes DOC or DOGGR, in the event of an emergency affecting the public health or safety, to inspect a well site or production facilities without consent or a warrant.
FISCAL EFFECT: Unknown
COMMENTS:
- Background. DOGGR was created in 1915 to supervise the drilling, operation, maintenance, and plugging and abandonment of onshore and offshore oil, gas, and geothermal wells. California is in the top five oil producing states in the country and produced over 200 million barrels of oil in 2014. There has been concern that DOGGR has had too much focus on protection of oil and gas resources in the state from production practices that could harm the ultimate level of hydrocarbon recovery. This focus has been at the cost of protection of groundwater, occupational safety, and public health. In October 2015, DOGGR released its “Renewal Plan for Oil and Gas Regulation,” which outlines reforms DOGGR will undertake with the goal of having “an effective regulatory program that ensures the protection of public health and the environment in the oil fields of California.” One issue DOGGR has identified as needing improvement is its enforcement of the state’s oil and gas laws and regulations.
- Penalties. Current law allows DOGGR to assess between $10,000 and $25,000 per day for each violation for well stimulation, but only up to $25,000 per violation for other penalties. Unlike other agencies, such as California Environmental Protection Agency, DOGGR is not authorized as part of a penalty order to permit an operator to fund supplemental environmental projects (SEPS) to benefit impacted communities in lieu of a portion of their civil penalty amount. This has created issues for DOGGR’s enforcement capabilities. In early 2014, a gas leak was detected beneath the community of Arvin, California. A total of eight families were evacuated from their homes and unable to return for several months. Affected residents smelled gas and complained of nosebleeds, headaches, coughing, and dizziness. DOGGR was only able to fine the operator, Petro Capital Recourses, $75,000 for three violations. This fine does not consider the severity of the violation such as it resulted in evacuations, illnesses, and environmental damage. The penalty does not act as deterrence, because it is not a significant amount of money for the company. In addition, the operator was prevented from conducting SEPS that could have helped reduce the impacts on the community of Arvin.
Another example is DOGGR recently issued a $75,000 civil penalty order to the Termo Company for three violations, because the company was illegally venting natural gas in the Aliso Canyon field. According to the penalty order, “once the pipeline was discovered, Operator destroyed the evidence of its existence before the division personnel could fully inspect it. The brazen nature of this violation shows that operator held little to no regard for the statutes and regulations or, more importantly, public health and safety.” DOGGR is not able to take into account the intentionality of the violation or how many days it occurred when issuing penalty orders.
This bill enhances DOGGR’s penalty authority and allows SEPs for 50% of a total civil penalty. However, DOGGR is still required to deposit its penalties into the Oil, Gas, and Geothermal Administrative Fund, which funds the operations of DOGGR. This fund is already supported by fees and DOGGR has the authority to adjust fees to cover its regulatory activities. Penalty funds should be used to help clean up oil and gas production contamination and deal with orphan wells issues that are not covered by fees. The author and committee may wish to consider amending the bill to create a separate penalty account that, upon appropriation, may be used by DOGGR to deal with clean up and orphan well issues.
- Shut-in Order. Oil and gas operations can cause harm to public health and the environment. DOGGR has issued shut-in orders when injection projects were injecting into aquifers that contained protected water. However, DOGGR has limited authority to shut-in wells that may be a threat to public health and the environment. If an operator appeals a shut-in order, the order is automatically stayed unless it is an emergency order. Emergency orders require two hearings where the Supervisor must prove the shut-in order is an emergency and an appeals hearing. Therefore, DOGGR is unable to compel an operator to shut-in their well immediately if there is a threat to public health or the environment. This bill would require operators to cease injection operations as soon as it is safe to do so if ordered by DOGGR, which would enhance DOGGR’s ability to protect public health and the environment.
- Investigations. This bill enhances DOGGR’s ability to conduct investigation by providing DOGGR with authority that other state agencies, such as the State Water Resources Control Board, already have. These provisions enhance DOGGR’s subpoena power, increasing DOGGR’s ability to require information from operators, such as technical or monitoring reports and provide DOGGR with more access to well sites and production facilities. These changes include authorizing DOGGR to inspect without consent or a warrant in the event of an emergency affecting public health or safety.
- Related/Prior Legislation.
AB 1882 (Williams, 2016) requires the State Water Resources Control Board (SWRCB) or appropriate regional water quality control board (RWQCB) to review and concur with any Underground Injection Control (UIC) project subject to review or approval. This bill allows SWRCB or appropriate RWQCB to propose additional requirements for a project, including groundwater monitoring. This bill is scheduled to be heard by this committee on April 4, 2016.
AB 2729 (Williams, 2016) creates disincentives for operators to maintain large idle well inventories, will ensure that funds are available to plug and abandon idle wells in the event that they are deserted, and will help improve public perception of oil and gas operations. This bill is scheduled to be heard by this committee on April 4, 2016.
SB 248 (Pavley, 2015) requires DOGGR to review and update its regulations, data management practices, and enhance required reporting. This bill prohibits the use of oil sumps after July 1, 2017. This bill also prohibits injection chemicals, unless DOGGR has complete information about specified properties and potential groundwater impacts. This bill is in the Assembly Appropriations Committee.
SB 4 (Pavley), Chapter 313, Statutes of 2013, established a comprehensive regulatory program for oil and gas well stimulation treatments, which includes, among other things, a study, the development of regulations, a permitting process, and public notification and disclosure. This bill also required DOGGR to assess between $25,000 and $10,000 per day that a violation related to well stimulation occurred.
AB 2453 (Tran, Chapter 264, Statutes of 2010) modified the appeals process at DOGGR to clarify that the judicial review of an appealed order be based on the “substantial evidence” standard of review. This bill shifted certain appeals from an informal hearing to a formal hearing, including appeals of plug and abandon orders or other actions such as rescission of an injection project approval. This bill clarified that when an order for remedial work, or a cease-and-desist order is issued under emergency circumstances, the order would not be stayed by the filing of an appeal, but rather, providing for an expedited hearing before the Director. The bill required DOGGR to reimburse the operator for required work if an order is invalidated on appeal.
AB 1960 (Nava, Chapter 562, Statutes of 2008) substantially strengthened and clarified DOGGR’s authority to regulate oil and gas production facilities. This bill imposed additional requirements on operators to minimize frequency and severity of oil spills, and authorized DOGGR to impose life-of-well and life-of-facility bonding on operators under specified circumstances. This bill also increased maximum penalties that DOGGR may impose from $5,000 to $25,000 per violation.
- Double Referral. This bill has been double referred to Assembly Judiciary Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
Department of Conservation (sponsor)
Alliance of Nurses for Healthy Environments
California Interfaith Power and Light
California League of Conservation Voters
Center for Environmental Health
Clean Water Action California
Environmental Defense Fund
Mainstreet Moms
Opposition
California Independent Petroleum Association
Analysis Prepared by: Michael Jarred / NAT. RES. / (916) 319-2092
Discussed in Hearing
2MIN
Senate Floor
10MIN
Senate Standing Committee on Judiciary
5MIN
Assembly Floor
59SEC
Assembly Floor
3MIN
Assembly Standing Committee on Appropriations
13MIN
Assembly Standing Committee on Judiciary
Assembly Standing Committee on Natural Resources
Bill Co-Author(s):