BILL NUMBER: AB 1960 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 23, 2008
AMENDED IN ASSEMBLY APRIL 28, 2008
AMENDED IN ASSEMBLY APRIL 22, 2008
AMENDED IN ASSEMBLY APRIL 3, 2008
INTRODUCED BY Assembly Member Nava
FEBRUARY 13, 2008
An act to amend Section 8670.64 of the Government Code, and to
amend Section 3236.5 of Sections 3009, 3200,
3201, 3202, 3236.5, 3401, 3402, 3403, and 3419 of, to add Section
3014.5 to , and to add Article 4.3 4.4
(commencing with Section 3260) 3270)
to Chapter 1 of Division 3 of, the Public Resources Code,
relating to public resources.
LEGISLATIVE COUNSEL'S DIGEST
AB 1960, as amended, Nava. Public resources: oil production
facilities and oil spills.
(1) Existing law generally regulates the drilling, operation,
maintenance, and abandonment of oil and gas wells. Existing law
authorizes the State Oil and Gas Supervisor or district deputy to
order the plugging and abandonment of a well that has been deserted,
and specifies the circumstances in which a rebuttable presumption of
desertion arises. A violation of these provisions of law is a crime.
A violation of existing law and regulations regulating the drilling,
operation, maintenance, and abandonment of oil and gas wells is
punishable by a maximum civil penalty of $5,000.
Existing law regulates the disposition of oil and gas wells, and
imposes a charge upon a person operating or owning an interest with
respect to production from an oil or gas well based on the production
of oil or gas from the well for the support and maintenance of the
Division of Oil, Gas, and Geothermal Resources.
This bill would require the Division of Oil, Gas, and Geothermal
Resources to prescribe, by regulations
regulation , minimum facility maintenance standards for oil
production facilities, including oil wells. The bill would require a
person proposing to construct, maintain, alter, or decommission an
oil production facility to comply with these standards and
obtain a permit from the division . The bill would require
the division to inspect an oil production facility to ensure
compliance with the standards and would authorize the division to
charge a fee on the oil production facility operator in an amount
sufficient to reimburse the division for the costs of implementing
these requirements. The supervisor would be authorized to issue a
cease and desist order to an oil production facility operator if the
supervisor determines that the oil production facility is operated in
violation of the prescribed standards. The division would be
authorized to impose a life-of-well or life-of-facility bond
requirement on an oil production facility operator that has a history
of violating regulations related to an oil production facility or
has outstanding liabilities to the state. Because a violation of
these provisions is a crime, this bill would impose a state-mandated
local program. The bill would increase the maximum civil penalty for
a violation of laws and regulations related to oil and gas wells to
$25,000.
This bill would also extend the regulations related to the
disposition of oil and gas wells and the imposition of the charge to
persons operating or owning an interest in the production from
defined oil and gas production facilities located in an oilfield.
(2) The Lempert-Keene-Seastrand Oil Spill Prevention Act requires
a person responsible for a discharge or a threatened discharge of oil
in marine waters to immediately report the discharge to the Office
of Emergency Services. A person who fails to notify the Office of
Emergency Services, upon conviction, is subject to a fine of not less
than $2,500 or more than $250,000 for a first violation and a fine
of not less than $5,000 or more than $500,000 for a 2nd or subsequent
violation, or by imprisonment in a county jail for not more than one
year, or by both the fine and imprisonment. That act also
imposes specified minimum criminal fines for specified
violations.
This bill would provide that a person who knowingly makes a false
or misleading marine oil spill report to the Office of Emergency
Services, upon conviction, is subject to a fine of not less
than $50,000 or more than $1,000,000. By creating a new
crime, this bill would impose a state-mandated local program.
The bill would eliminate the specified minimum criminal fines.
(3) Existing law requires a person who handles hazardous
materials, upon discovery, to immediately report a release or a
threatened release of a hazardous substance to the Office of
Emergency Services.
This bill would subject, upon conviction, a person who knowingly
makes a false or misleading report on an oil spill in waters of the
state other than marine waters to the Office of Emergency Services to
a fine of not more than $50,000. By creating a new crime, this bill
would impose a state-mandated local program.
(4) 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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 8670.64 of the Government Code is amended to
read:
8670.64. (a) A person who commits any of the following acts,
shall, upon conviction, be punished by imprisonment in a county jail
for not more than one year or by imprisonment in the state prison:
(1) Except as provided in Section 8670.27, knowingly fails to
follow the direction or orders of the administrator in connection
with an oil spill.
(2) Knowingly fails to notify the Coast Guard that a vessel is
disabled within one hour of the disability and the vessel, while
disabled, causes a discharge of oil which enters marine waters. For
the purposes of this paragraph, "vessel" means a vessel, as defined
in Section 21 of the Harbors and Navigation Code, of 300 gross
registered tons or more.
(3) Knowingly engages in or causes the discharge or spill of oil
into marine waters, or a person who reasonably should have known that
he or she was engaging in or causing the discharge or spill of oil
into marine waters, unless the discharge is authorized by the United
States, the state, or another agency with appropriate jurisdiction.
(4) Knowingly fails to begin cleanup, abatement, or removal of
spilled oil as required in Section 8670.25.
(b) The court shall also impose upon a person convicted of
violating subdivision (a), a fine of not less than five
thousand dollars ($5,000) or more than five hundred
thousand dollars ($500,000) for each violation. For purposes of this
subdivision, each day or partial day that a violation occurs is a
separate violation.
(c) (1) A person who knowingly does any of the acts specified in
paragraph (2) shall, upon conviction, be punished by a fine of not
less than two thousand five hundred dollars ($2,500) or
more than two hundred fifty thousand dollars ($250,000), or
by imprisonment in a county jail for not more than one year, or by
both the fine and imprisonment. Each day or partial day that a
violation occurs is a separate violation. If the conviction is for a
second or subsequent violation of this subdivision, the person shall
be punished by imprisonment in the state prison or in a county jail
for not more than one year, or by a fine of not less than five
thousand dollars ($5,000) or more than five hundred thousand dollars
($500,000), or by both the fine and imprisonment:
(2) The acts subject to this subdivision are all of the following:
(A) Failing to notify the Office of Emergency Services in
violation of Section 8670.25.5.
(B) Continuing operations for which an oil spill contingency plan
is required without an oil spill contingency plan approved pursuant
to Article 5 (commencing with Section 8670.28).
(C) Except as provided in Section 8670.27, knowingly failing to
follow the material provisions of an applicable oil spill contingency
plan.
(d) (1) A person who knowingly makes a false or misleading marine
oil spill report to the Office of Emergency Services shall, upon
conviction, be punished by a fine of not less than fifty
thousand dollars ($50,000) or more than one million dollars
($1,000,000).
(2) A person who knowingly makes a false or misleading report on
an oil spill occurring in waters of the state other than marine
waters shall, upon conviction, be punished by a fine of not more than
fifty thousand dollars ($50,000).
SEC. 2. Section 3009 of the Public
Resources Code is amended to read:
3009. "Operator" means any a person
who, by virtue of ownership, or under the authority of a lease or
any other agreement, has the right to drill, operate, maintain, or
control a well or oil and gas production facility
located in an oilfield .
SEC. 3. Section 3014.5 is added to the
Public Resources Code , to read:
3014.5. "Oil and gas production facility" includes tanks, flow
lines, headers, gathering lines, wellheads, heater treaters, pumps,
valves, compressors, pipelines that are not under the jurisdiction of
the State Fire Marshal pursuant to Section 51010 of the Government
Code, and any other facilities or equipment that the State Oil and
Gas Supervisor determines warrant oversight for the purposes of
protecting and conserving natural resources, the environment, and the
public.
SEC. 4. Section 3200 of the Public
Resources Code is amended to read:
3200. Every An owner or operator of
any a well or oil and gas
production facility located in an oilfield shall designate an
agent, giving his or her address, who resides in this state, to
receive and accept service of all orders, notices, and processes of
the supervisor or any a court of law.
Every person so appointing an agent shall, within five days after the
termination of the agency, notify the supervisor, in writing, of the
termination, and unless operations are discontinued, shall appoint a
new agent.
SEC. 5. Section 3201 of the Public
Resources Code is amended to read:
3201. The operator of any a well
or oil and gas production facility located in an oilfield
shall notify the supervisor or the district deputy, in writing, in
such form as the supervisor or the district deputy may direct, of the
sale, assignment, transfer, conveyance, exchange, or other
disposition of the well by the operator of the well or oil and
gas production facility located in an oilfield as soon as is
reasonably possible, but in no event later than the date that the
sale, assignment, transfer, conveyance, exchange, or other
disposition becomes final. The operator shall not be relieved of
responsibility for the well until the supervisor or the district
deputy acknowledges the sale, assignment, transfer, conveyance,
exchange, or other disposition, in writing, and the person acquiring
the well is in compliance with Section 3202. The operator's notice
shall contain all of the following:
(a) The name and address of the person to whom the well or
oil and gas production facility located in an oilfield was or
will be sold, assigned, transferred, conveyed, exchanged, or
otherwise disposed.
(b) The name and location of the well or oil and gas
production facility located in an oilfield , and a description
of the land upon which the well is situated.
(c) The date that the sale, assignment, transfer, conveyance,
exchange, or other disposition becomes final.
(d) The date when possession was or will be relinquished by the
operator as a result of that disposition.
SEC. 6. Section 3202 of the Public
Resources Code is amended to read:
3202. Every A person who acquires
the right to operate a well or oil and gas production facility
located in an oilfield , whether by purchase, transfer,
assignment, conveyance, exchange, or other disposition, shall, as
soon as it's reasonably possible, but not later than the date when
the acquisition of the well or oil and gas production facility
located in an oilfield becomes final, notify the supervisor or
the district deputy, in writing, of the person's operation. The
acquisition of a well or oil and gas production facility located
in an oilfield shall not be recognized as complete by the
supervisor or the district deputy until the new operator provides all
of the following material:
(a) The name and address of the person from whom the well or
oil and gas production facility located in an oilfield was
acquired.
(b) The name and location of the well or oil and gas
production facility located in an oilfield , and a description
of the land upon which the well or oil and gas production
facility located in an oilfield is situated.
(c) The date when the acquisition becomes final.
(d) The date when possession was or will be acquired.
(e) An indemnity bond for each idle well. The bond shall be in an
amount as provided in Section 3204 or 3205. The conditions of the
bond shall be the same as the conditions stated in Section 3204. An
operator that has provided an individual bond required by this
subdivision in an amount as provided in Section 3204 shall not be
required additionally to comply with the requirements of Section
3206. An operator who has provided a blanket indemnity bond in the
minimum amount required in subdivision (a) or (b) of Section 3205
shall additionally comply with Section 3206 for any idle wells not
covered by a bond provided under Section 3204.
SEC. 2. SEC. 7. Section 3236.5 of
the Public Resources Code is amended to read:
3236.5. (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. Acts of
God and acts 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 upon a determination that a
violation has been committed by the person charged, following notice
to the person and an opportunity to be heard. The notice shall be
served by personal service or certified mail, and shall inform the
alleged violator of the date, time, and place of the hearing, the
activity that is alleged to be a violation, the statute or regulation
violated, and the hearing and judicial review procedures. The notice
shall be provided at least 30 days before the hearing. The hearing
shall be held before the supervisor or the supervisor's designee in
Sacramento or in the district in which the violation occurred. The
hearing is not required to be conducted pursuant to Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of
the Government Code. 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, (1) the extent of harm caused by the
violation, (2) the persistence of the violation, (3) the
pervasiveness of the violation, and (4) the number of prior
violations by the same violator.
(b) Notwithstanding this chapter, an order of the supervisor
imposing a civil penalty shall not be reviewable pursuant to Article
6 (commencing with Section 3350). A person upon whom a civil penalty
is imposed by a final order of the supervisor may obtain judicial
review of that final order by seeking a writ of mandate pursuant to
Section 1094.5 of the Code of Civil Procedure within 30 days of the
date of that final order. 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 operations that are 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) Any amount collected under this section shall be deposited in
the Oil, Gas, and Geothermal Administrative Fund.
SEC. 3. SEC. 8. Article 4.3
4.4 (commencing with Section 3260)
3270) is added to Chapter 1 of Division 3 of the
Public Resources Code, to read:
Article 4.3. 4.4. Regulation of
Oil Production Facilities
3260. 3270. (a) The division shall,
by regulation, prescribe minimum facility maintenance standards for
an oil production facility, including, but not limited to, an oil
well, operating in the state. The regulations shall include standards
for all of the following:
(1) Leak detection.
(2) Corrosion prevention and testing.
(3) Tank inspection and cleaning.
(4) Valve and gauge maintenance, and secondary containment
maintenance.
(5) Other facility or equipment maintenance that the supervisor
deems important for the proper maintenance of oil production
operations in the state and that the supervisor determines are
necessary to prevent damage to life, threats to health, property, and
natural resources; damage to underground oil and gas deposits from
infiltrating water and other causes; loss of oil, gas, or reservoir
energy; and damage to underground and surface waters suitable for
irrigation or domestic use by the infiltration of, or the addition
of, detrimental substances.
(b) A person who constructs, maintains, alters, or decommissions
an oil well or oil production facility shall comply with the
standards prescribed pursuant to subdivision (a).
(c) Reference to "good oilfield practice" in any provisions of law
shall be to the regulations developed pursuant to subdivision (a).
3260.1. (a) A person who proposes to construct, maintain, alter,
or decommission an oil production facility shall obtain and maintain
a current and valid permit from the department.
(b) The supervisor shall establish a fee schedule for the permit
that is sufficient and does not exceed the amount necessary to
reimburse the department for the implementation of this article. The
supervisor shall, on a biennial basis, revise the fee schedule to
ensure the fees collected are sufficient to cover the division's
costs in implementing this article.
3260.2. 3270.1. Within three months
of the acquisition of an oil production facility or the initial
production at an oil production facility, the facility operator shall
file with the division an oil spill contingency plan.
3260.3. 3270.2. The division shall
inspect an oil production facility to ensure compliance with the
standards prescribed pursuant to subdivision (a) of Section
3260 3270 .
3260.4. To the extent feasible, the division shall coordinate the
permitting, inspection, and fee collection pursuant to this article
with other similar regulatory activities related to the oil
production facility undertaken by the division pursuant to other
provisions of law.
3260.5. 3270.3. Upon a
determination by the supervisor or the district deputy
that an oil production facility is being operated in violation of the
standards prescribed in subdivision (a) of Section 3260
3270 , the supervisor may issue a cease and
desist order to an oil production facility operator requiring the
operator to cease operation until the operator demonstrates, to the
satisfaction of the supervisor, that the violation has been
corrected.
3260.6. 3270.4. (a) In addition to
the bonding requirements under Article 4 (commencing with Section
3200), for an oil production facility operator with a history of
violating this chapter or that has outstanding liabilities to the
state, the division may require a life-of-well or life-of-facility
bond in an amount to ensure all of the following:
(1) The proper plugging and abandonment of the well by the state.
(2) The safe decommissioning of the oil production facility.
(3) The financing of spill and incident cleanup with limited costs
to the state.
(b) Upon the failure of the oil production facility operator to
properly plug and abandon an oil well, safely decommission an oil
production facility, or perform the appropriate spill and incident
cleanup, the supervisor may expend the bond for those purposes.
(c) The supervisor shall release the bond obligation upon the
satisfactory decommissioning of the oil production facility.
3260.7. This article does not limit a local authority's
jurisdiction to regulate an oil production facility.
SEC. 9. Section 3401 of the Public
Resources Code is amended to read:
3401. The proceeds of charges levied, assessed, and collected
pursuant to this article upon the properties of every person
operating or owning any an interest in
the production of any a well or
oil and gas production facility located in an oilfield shall be
used exclusively for the support and maintenance of the division of
the department charged with the supervision of oil and gas , or
an oil and gas production facility located in an oilfield .
SEC. 10. Section 3402 of the Public
Resources Code is amended to read:
3402. There shall annually be imposed upon the person operating
each an oil well or oil and gas
production facility located in an oilfield in this state, or
owning royalty or other interests in with
respect to the production from the well or oil and gas
production facility located in an oilfield , a charge
which that shall be payable to the
Treasurer and which that shall be
computed at a uniform rate per barrel of oil produced from the well
or oil and gas production facility located in an oilfield
for the preceding calendar year. The charge shall be apportioned
among all of those persons in fractional amounts proportionate to
their respective fractional interests in with
respect to the production of the well or oil and gas
production facility located in an oilfield , but the whole of
the charge shall be payable by the operator, who shall withhold their
respective proportionate shares of the charge from the amounts
otherwise payable or deliverable to the owners of royalty or other
interests. In the case of a penalty for late payment as provided in
Section 3420, no apportionment shall be made.
SEC. 11. Section 3403 of the Public
Resources Code is amended to read:
3403. There shall annually be imposed upon the person operating
each a gas well or oil and gas
production facility located in an oilfield in this state, or
owning royalty or other interests with respect to the production from
the well or oil and gas production facility located in an
oilfield , a charge , which that
shall be payable to the Treasurer, based upon the amount of gas
produced in the preceding calendar year, other than gas
which that is used for recycling or otherwise in
oil-producing operations, and which that
shall be computed at a uniform rate per ten thousand cubic
feet. The charge shall be apportioned among all of those persons in
fractional amounts proportionate to their respective fractional
interests with respect to the production of the well or oil and
gas production facility located in an oilfield , but the whole
of the charge shall be payable by the operator, who shall withhold
the respective proportionate shares of the charge from the amounts
otherwise payable or deliverable to the owners of royalty or other
interests. In the case of a penalty for a late payment as provided in
Section 3420, no apportionment shall be made.
SEC. 12. Section 3419 of the Public
Resources Code is amended to read:
3419. On or before the first of July the department shall deliver
to the State Controller the record of assessments and charges,
certified to by the director, which certificate shall be
substantially as follows: "I, ____, Director of Conservation, do
hereby certify that between the first of March and the first of July,
19__, 20__, I made diligent inquiry
and examination to ascertain all property and persons, firms,
corporations and associations subject to assessment as required by
the provisions of this chapter, providing for the assessment and
collection of charges; that I have faithfully complied with all the
duties imposed upon me by law; that I have not imposed any unjust or
double assessment through malice or ill will or otherwise; nor
allowed any person, firm, corporation, or association, or property to
escape a just assessment or charge through favor or regard or
otherwise." Failure to subscribe the certificate to the record of
assessments and charges, or any certificate, shall not affect the
validity of any assessment or charge.
SEC. 4. SEC. 13. No reimbursement is
required by this act pursuant to Section 6 of Article XIII B 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 XIII
B of the California Constitution.