BILL NUMBER: AB 1960 CHAPTERED
BILL TEXT
CHAPTER 562
FILED WITH SECRETARY OF STATE SEPTEMBER 29, 2008
APPROVED BY GOVERNOR SEPTEMBER 29, 2008
PASSED THE SENATE AUGUST 14, 2008
PASSED THE ASSEMBLY AUGUST 18, 2008
AMENDED IN SENATE AUGUST 12, 2008
AMENDED IN SENATE JULY 1, 2008
AMENDED IN SENATE JUNE 17, 2008
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, to amend
Section 25515 of the Health and Safety Code, and to amend Sections
3009, 3200, 3201, 3202, 3236.5, 3401, and 3419 of, to add Section
3010 to, and to add Article 4.4 (commencing with Section 3270) to
Chapter 1 of Division 3 of, the Public Resources Code, relating to
public resources.
LEGISLATIVE COUNSEL'S DIGEST
AB 1960, 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.
This bill would require the Division of Oil, Gas, and Geothermal
Resources to prescribe, by regulation, minimum facility maintenance
standards for production facilities, as defined. The bill would
require a person proposing to construct, acquire, maintain, or alter
a production facility to comply with these standards. The bill would
require an operator to notify the supervisor of the construction,
alteration, or decommission of a production facility, to maintain at
the production facility's local office specified records, and to
provide access to, and copies of, these records to the supervisor.
The bill would require the division to inspect a production facility
to ensure compliance with the standards and would authorize the
division to charge the production facility operator a fee 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 a production facility operator
if the supervisor determines that the production facility is operated
in violation of the prescribed standards. The division would be
authorized to impose a life-of-well or life-of-production facility
bond requirement on a production facility operator that has a history
of violating regulations related to a 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 to production facilities.
(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 the above-described fine or
imprisonment, or both that fine and imprisonment. 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, among other agencies,
the Office of Emergency Services. A person who fails to provide the
report, upon conviction, is subject to a specified fine or
imprisonment, or both that fine and imprisonment.
This bill would subject, upon conviction, a person who fails to
provide the required report or who knowingly makes a false or
misleading report on an oil spill in waters of the state other than
marine waters 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.
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) Knowingly making a false or misleading marine oil spill report
to the Office of Emergency Services.
(C) 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).
(D) Except as provided in Section 8670.27, knowingly failing to
follow the material provisions of an applicable oil spill contingency
plan.
SEC. 2. Section 25515 of the Health and Safety Code is amended to
read:
25515. (a) A person or business who violates Section 25507 shall,
upon conviction, be punished by a fine of not more than twenty-five
thousand dollars ($25,000) for each day of violation, or by
imprisonment in the county jail for not more than one year, or by
both the fine and imprisonment. If the conviction is for a violation
committed after a first conviction under this section, the person
shall be punished by a fine of not less than two thousand dollars
($2,000) or more than fifty thousand dollars ($50,000) per day of
violation, or by imprisonment in the state prison for 16, 20, or 24
months or in the county jail for not more than one year, or by both
the fine and imprisonment. Furthermore, if the violation results in,
or significantly contributes to, an emergency, including a fire, to
which the county or city is required to respond, the person shall
also be assessed the full cost of the county or city emergency
response, as well as the cost of cleaning up and disposing of the
hazardous materials.
(b) Notwithstanding subdivision (a), a person who fails to report,
pursuant to Section 25507, 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).
(c) Notwithstanding subdivision (a), 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. 3. Section 3009 of the Public Resources Code is amended to
read:
3009. "Operator" means 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 production
facility.
SEC. 4. Section 3010 is added to the Public Resources Code, to
read:
3010. "Production facility" means any equipment attendant to oil
and gas production or injection operations including, but not limited
to, tanks, flowlines, headers, gathering lines, wellheads, heater
treaters, pumps, valves, compressors, injection equipment, and
pipelines that are not under the jurisdiction of the State Fire
Marshal pursuant to Section 51010 of the Government Code.
SEC. 5. Section 3200 of the Public Resources Code is amended to
read:
3200. An owner or operator of a well or production facility 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 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. 6. Section 3201 of the Public Resources Code is amended to
read:
3201. The operator of a well or production facility 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 or production facility by the operator of the well or
production facility 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 or
production facility 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 or
production facility 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
production facility was or will be sold, assigned, transferred,
conveyed, exchanged, or otherwise disposed.
(b) The name and location of the well or production facility, and
a description of the land upon which the well or production facility
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. 7. Section 3202 of the Public Resources Code is amended to
read:
3202. A person who acquires the right to operate a well or
production facility, whether by purchase, transfer, assignment,
conveyance, exchange, or other disposition, shall, as soon as it is
reasonably possible, but not later than the date when the acquisition
of the well or production facility becomes final, notify the
supervisor or the district deputy, in writing, of the person's
operation. The acquisition of a well or production facility 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
production facility was acquired.
(b) The name and location of the well or production facility, and
a description of the land upon which the well or production facility
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. 8. 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 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) Any amount collected under this section shall be deposited in
the Oil, Gas, and Geothermal Administrative Fund.
SEC. 9. Article 4.4 (commencing with Section 3270) is added to
Chapter 1 of Division 3 of the Public Resources Code, to read:
Article 4.4. Regulation of Production Facilities
3270. (a) The division shall, by regulation, prescribe minimum
facility maintenance standards for all production facilities in the
state. The regulations shall include, but are not limited to,
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 operation of production facilities and
that the supervisor determines are necessary to prevent damage to
life, 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 purposes by the
infiltration of, or the addition of, detrimental substances.
(b) An operator who constructs, acquires, maintains, or alters an
oil well or a production facility shall comply with the standards
prescribed pursuant to subdivision (a).
(c) In a form and at a time prescribed by the division in
regulation, an operator shall notify the supervisor of the
construction, alteration, or decommissioning of a production
facility.
(d) An operator shall maintain at the production facility's local
office records of maintenance and repair operations, tests, and
inspections, and shall provide the supervisor with access to these
records at all times during normal business hours and with copies of
the records immediately, upon request.
3270.1. Within three months of its acquisition of a production
facility or at the time of the initial production at its production
facility, the facility operator shall file with the division a spill
contingency plan.
3270.2. The division shall inspect production facilities to
ensure compliance with the standards prescribed in the regulations
promulgated pursuant to subdivision (a) of Section 3270.
3270.3. In addition to any other remedy provided by law, the
supervisor, upon his or her determination or that of the district
deputy that a production facility is being operated in violation of
the standards prescribed in subdivision (a) of Section 3270, may
issue a cease and desist order to a 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.
3270.4. (a) In addition to the bonding requirements under Article
4 (commencing with Section 3200), for an operator with a history of
violating this chapter or that has outstanding liabilities to the
state associated with a well or production facility, the supervisor
may require a life-of-well or life-of-production facility bond in an
amount adequate to ensure all of the following:
(1) The proper plugging and abandonment of each well.
(2) The safe decommissioning of each production facility.
(3) The financing of spill response and incident cleanup.
(b) Upon the failure of an operator to properly plug and abandon a
well, decommission a production facility, or perform the appropriate
spill response and incident cleanup, the supervisor may levy on the
bond to obtain money to pay the cost of the work.
(c) The supervisor may release a life-of-production facility bond
upon the satisfactory decommissioning of a production facility, or
when an operator has provided another valid life-of-production
facility bond.
(d) The supervisor may release a life-of-well bond upon the
satisfactory plugging and abandonment of all wells covered by the
bond or when an operator has provided another valid life-of-well
bond.
(e) Whenever an operator sells, assigns, transfers, conveys,
exchanges, or otherwise disposes to another operator a well or
production facility that is covered by a life-of-well bond or a
life-of-production facility bond, the new operator shall replace the
life-of-well or life-of-production bond, as applicable, and maintain
the new bond for five years before it may be released by the
supervisor.
(f) In lieu of the indemnity bond required by this section, the
supervisor may accept a deposit given pursuant to Article 7
(commencing with Section 995.710) of Chapter 2 of Title 14 of Part 2
of the Code of Civil Procedure, excluding a deposit of money, bearer
bonds, or bearer notes.
(g) The supervisor shall adopt regulations specifying the content,
including the conditions, of the bond or other security instrument
required by this section.
SEC. 10. 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 an interest in the production of any well shall
be used exclusively for the support and maintenance of the division
of the department charged with the supervision of oil and gas
operations.
SEC. 11. 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,
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. 12. 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.