BILL NUMBER: AB 2453	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 15, 2010

INTRODUCED BY   Assembly Member Tran

                        FEBRUARY 19, 2010

   An act to amend Sections 3225, 3236.5, 3743, and 3744 of, to add
 Section 3763 to, and to repeal and add Sections 3350, 3351,
3352, 3353, 3354, 3355, 3356, 3762, 3764, 3765, 3766, 3767, and 3768
of, the   Section 3763 to, to repeal Sections 3352,
3353, 3764, and 3765 of, and to repeal and add Sections 3350, 3351,
3354, 3355, 3356, 3762, 3766, 3767, and 3768 of, the  Public
Resources Code, relating to oil and gas.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2453, as amended, Tran. Oil and gas: operations: enforcement
actions.
   Under existing law, the Division of Oil, Gas, and Geothermal
Resources in the Department of Conservation regulates the operation
of oil, gas, and geothermal wells in specified districts of the
state. Existing law establishes procedures for an operator of a well
or owner of a rig, derrick, or other operating structure to appeal
from an order of the State Oil and Gas Supervisor or a district
deputy regarding the operation of a well, or drilling or testing
operations.
   This bill would make numerous changes to the appeal process and
procedures. The bill would require an order of the supervisor or a
district deputy to state the factual basis for the order, the
statutory and regulatory basis of the action, and the penalties and
requirements imposed on the operator. The bill would also require a
cease and desist order to specify the operations to cease and a
detailed explanation of the action to be taken by the operator to
permit operations to resume.
   The bill would, among other things, provide for review of an order
of the supervisor imposing a civil penalty by the director, revise
the requirements for filing a notice of appeal, provide that the
filing of an appeal does not stay an order for remedial work or a
cease and desist order issued under emergency circumstances and, in
these circumstances, require an expedited hearing before the
director. The bill requires the division to reimburse an operator for
required remedial work if an order is invalidated on appeal.
   The bill, would also, among other things, require  certain
  all  appeals to be heard in a formal hearing
process before an administrative law judge, instead of in an informal
hearing before the director of the department  , specify
certain procedures for a hearing before the director  , 
except for certain emergency orders,  and  would 
revise the scope of the judicial review of an appealed order.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 3225 of the Public Resources Code is amended to
read:
   3225.  (a) An order of the supervisor or a district deputy issued
pursuant to this chapter shall provide a clear and concise recitation
of the acts or omissions with which the operator is charged. The
order shall state all penalties and requirements imposed on the
operator in connection with the acts or omissions charged and the
order shall provide references to the provisions of this code and the
regulations that support the imposition of the penalties and
requirements.
   (b) An order requiring an operator to cease and desist operations
pursuant to Section 3270.3 shall specify the operations that the
operator is required to cease and desist and shall provide a detailed
explanation of the steps that the operator shall take before the
supervisor will permit the operations to resume.
   (c) An order of the supervisor or a district deputy shall be in
writing and shall be served on the operator by personal service or by
certified mail.
   (d)  Whenever   When  the supervisor or
a district deputy issues a written order concerning an operation, an
appeal may be made from the order pursuant to the procedures
contained in Article 6 (commencing with Section 3350). The order
shall inform the operator of its right to appeal the order.
  SEC. 2.  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. 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.
   (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) Any amount collected under this section shall be deposited in
the Oil, Gas, and Geothermal Administrative Fund.
  SEC. 3.  Section 3350 of the Public Resources Code is repealed.
  SEC. 4.  Section 3350 is added to the Public Resources Code, 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.
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) The filing of a written notice of appeal shall operate as a
stay of the order, except when an order for remedial work or an order
to cease and desist operations is issued as an emergency order
pursuant to Section 3226. If the order is an emergency order, the
operator shall immediately cease and desist the specified 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 set aside or modified on
appeal, the costs incurred by the operator for whatever work is not
required by the set aside or modified order shall be refunded to the
operator by the supervisor or the costs incurred by the supervisor
for the work shall not be imposed on the operator. 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 repealed.
  SEC. 6.  Section 3351 is added to the Public Resources Code, to
read:
   3351.  (a)  A   Except as provided in
subdivision (c), 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 operator's
wells are deserted and should be plugged and abandoned. 

   (2) Imposing civil penalties totaling more than ten thousand
dollars ($10,000).  
   (3) Rescinding an injection project approval for a project that
has already commenced. 
    (4)     Imposing a
life-of-well bond or a life-of-production facility bond. 
 3 of Title 2 of the Government Code for an appeal from any
order. 
   (b) An order issued pursuant to Section 3225 shall satisfy the
requirement of Section 11503 of the Government Code that an
accusation be filed. 
   (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 remedial work or to cease and
desist operations, a hearing shall be conducted by the director in
accordance with Sections 3352 and 3353 for the limited purpose

    (c)    For an appeal of an order that is
also an emergency order for remedial work or to cease and desist
operations, a hearing shall be conducted in accordance with Article
13 (commencing with Section 11460.10) of Chapter 4.5 of Part 1 of
Division 3 of Title 2 of the Government Code for the limited purpose
 of considering the emergency order for remedial work or to
cease and desist operations. 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. 7.  Section 3352 of the Public Resources Code is repealed.

  SEC. 8.    Section 3352 is added to the Public
Resources Code, 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 director's 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 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 director's 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 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.
   (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. 
   SEC. 9.  SEC. 8.   Section 3353 of the
Public Resources Code is repealed. 
  SEC. 10.    Section 3353 is added to the Public
Resources Code, to read:
   3353.  (a) Within 30 days after the close of a hearing conducted
by the director, the director shall issue a written decision
affirming, setting aside, or modifying the order from which the
appeal was taken. The director's written decision shall be based upon
the preponderance of the evidence and shall set forth the director's
factual findings, legal conclusions, and rationale for the result.
The director may extend the 30-day period for issuing the written
decision if the extension is agreed to by the operator.
   (b) The director shall file the written decision with the
supervisor and serve it on the operator as soon as it has been
completed, at which time the decision shall be deemed final. The
director's decision shall supersede the order of the supervisor from
which the appeal was made. If the director affirmed or modified the
order, the director shall retain jurisdiction until the operator has
completed the work required to be performed by the order. 
   SEC. 11.   SEC. 9.   Section 3354 of the
Public Resources Code is repealed.
   SEC. 12.   SEC. 10.   Section 3354 is
added to the Public Resources Code, to read: 
   3354.  (a) Following a hearing conducted by the director pursuant
to Sections 3352 and 3353, the operator may obtain judicial review of
the decision of the director by filing a petition for writ of
administrative mandamus in the superior court of the county where the
division's district office from which the order was issued is
located. The operator shall file the petition within 30 days after
the date the operator was served with the decision.
   (b) Following a hearing conducted in accordance with Chapter

    3354.    Following a hearing conducted in accordance
with Chapter  5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code  , or a hearing
conducted in accordance with Article 13 (commencing with Section
11460.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2 of the
Government Code  , the operator may obtain judicial review of
the decision pursuant to Section 11523 of the Government Code.
   SEC. 13.   SEC. 11.   Section 3355 of
the Public Resources Code is repealed.
   SEC. 14.   SEC. 12.   Section 3355 is
added to the Public Resources Code, to read:
   3355.  When an operator seeks judicial review of a decision of the
director  , including a decision  following a
hearing conducted in accordance with Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code, the court shall hear the cause on the record before the
director or an administrative law judge. New or additional evidence
shall not be introduced in court. The court's inquiry shall extend to
whether the director acted without or in excess of jurisdiction,
whether there was a fair hearing, and whether there is any
prejudicial abuse of discretion. Abuse of discretion is established
if the administrative proceeding has not been conducted in the manner
required by law, the decision is not supported by the findings, or
the findings are not supported by substantial evidence in light of
the whole record.
   SEC. 15.   SEC. 13.   Section 3356 of
the Public Resources Code is repealed.
   SEC. 16.   SEC. 14.   Section 3356 is
added to the Public Resources Code, to read:
   3356.  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 supervisor's
agents shall constitute a state tax lien against the real and
personal property of the operator pursuant to Section 3423.
   SEC. 17.   SEC. 15.   Section 3743 of
the Public Resources Code is amended to read:
   3743.  (a) An order of the supervisor or a district deputy issued
pursuant to this chapter shall provide a clear and concise recitation
of the acts or omissions with which the operator is charged. The
order shall state all penalties and requirements imposed on the
operator in connection with the acts or omissions charged and the
order shall provide citations to the provisions of this code and the
regulations that support the imposition of the penalties and
requirements.
   (b) An order of the supervisor or a district deputy shall be in
writing and shall be served on the operator by personal service or by
certified mail.
   (c)  Whenever   When    the
supervisor or a district deputy makes or gives any written direction
concerning the drilling, testing, or other operations in any well
drilled, in process of drilling, or being abandoned, and the
operator, owner, or representative of either, serves written notice,
either personally or by mail, addressed to the supervisor, or to the
district deputy at his or her office in the district, requesting that
a definite order be made upon the subject, the supervisor or the
district deputy shall, within five days after receipt of the notice,
deliver a final written order on the subject matter.
   (d)  Whenever   When  the supervisor or
a district deputy issues any written order concerning an operation,
an appeal may be made from the order pursuant to Sections 3762 to
3768, inclusive. The order shall inform the operator of its right to
appeal the order.
   SEC. 18.   SEC. 16.   Section 3744 of
the Public Resources Code is amended to read:
   3744.  (a) Within 30 days from the date of service of an order
made pursuant to Section 3743, or if there has been an appeal from
the order to the director, within 30 days after service of the
decision of the director, or if a review has been taken of the order
of the director, within 10 days after the affirmance of the order,
the operator shall commence in good faith the work ordered and
continue it until completion. If the work has not been commenced and
continued to completion, the supervisor may appoint necessary agents
to enter the premises and perform the work. An accurate account of
the expenditures shall be kept. Any amount so expended constitutes a
lien against the real or personal property of the operator upon which
the work is done and the lien has the force, effect, and priority of
a judgment lien pursuant to Section 3772.
   (b) Notwithstanding Section 3741, 3743, or 3755, if the supervisor
determines that an emergency exists, the supervisor may make formal
or emergency orders or undertake any other action that the supervisor
determines to be necessary for the protection of life, health,
property, or natural resources.
   SEC. 19.   SEC. 17.   Section 3762 of
the Public Resources Code is repealed.
   SEC. 20.   SEC. 18.   Section 3762 is
added to the Public Resources Code, to read:
   3762.  (a) The operator of a well 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. The operator shall
file the appeal within 10 days of the service of the order. 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 is served by mail, the time for responding
shall be determined as provided in Section 1013 of the Code of Civil
Procedure.
   (b) The filing of a written notice of appeal shall operate as a
stay of the order, except when an order for remedial work is issued
as an emergency order pursuant to Section 3744. 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 set aside or modified on appeal, the costs incurred by the
operator for whatever work is not required by the set aside or
modified order shall be refunded to the operator by the supervisor or
the costs incurred by the supervisor for the work shall not be
imposed on the operator. 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. 21.   SEC. 19.   Section 3763 is
added to the Public Resources Code, to read:
   3763.  (a)  A   Except as provided in
subdivision (c), 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 3755 finding that the operator's
wells are deserted and should be plugged and abandoned. 
    (2)     Rescinding an
injection project approval for a project that has already commenced.
  3 of Title 2 of the Government Code for an appeal from
any order. 
   (b) An order issued pursuant to Section 3743 shall satisfy the
requirement of Section 11503 of the Government Code that an
accusation be filed. 
   (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 3764 and 3765.  
   (d) For an appeal of an order that is described in subdivision (a)
and is also an emergency order for remedial work, a hearing shall be
conducted by the director in accordance with Sections 3352 and 3353
for the limited purpose of considering the 
    (c) For an appeal of an order that is also an emergency order
for remedial work, a hearing shall be conducted in accordance with
Article 13 (commencing with Section 11460.10) of   Chapter
4.5 of Part 1 of Division 3 of Title 2 of the Government Code for the
limited purpose of considering the  emergency order for
remedial work. 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. 22.   SEC. 20.   Section 3764 of
the Public Resources Code is repealed. 
  SEC. 23.    Section 3764 is added to the Public
Resources Code, to read:
   3764.  (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 director's 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 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 director's 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 application of the operator or the
supervisor.
   (b) The director shall conduct the hearing within the district
where the majority of the wells 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.
   (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. 
   SEC. 24.   SEC. 21.   Section 3765 of
the Public Resources Code is repealed. 
  SEC. 25.    Section 3765 is added to the Public
Resources Code, to read:
   3765.  (a) Within 30 days after the close of a hearing conducted
by the director, the director shall issue a written decision
affirming, setting aside, or modifying the order from which the
appeal was taken. The director's written decision shall be based upon
the preponderance of the evidence and shall set forth the director's
factual findings, legal conclusions, and rationale for the result.
The director may extend the 30-day period for issuing the written
decision provided that the extension is agreed to by the operator.
   (b) The director shall file the written decision with the
supervisor and serve it on the operator as soon as it has been
completed, at which time the decision shall be deemed final. The
director's decision shall supersede the order of the supervisor from
which the appeal was made. If the director affirmed or modified the
order, the director shall retain jurisdiction until the operator has
completed the work required to be performed by the order. 
   SEC. 26.   SEC. 22.   Section 3766 of
the Public Resources Code is repealed.
   SEC. 27.   SEC. 23.   Section 3766 is
added to the Public Resources Code, to read: 
   3766.  (a) Following a hearing conducted by the director pursuant
to Sections 3764 and 3765, the operator may obtain judicial review of
the decision of the director by filing a petition for writ of
administrative mandamus in the superior court of the county where the
division's district office from which the order was issued is
located. The operator shall file the petition within 30 days after
the date the operator was served with the decision.
   (b) Following a hearing conducted in accordance with Chapter

    3766.    Following a hearing conducted in accordance
with Chapter  5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code  , or a hearing
  conducted in accordance with Article 13 (commencing with
Section 11460.10) of Chapter 4.5 of Part 1 of Division 3 of Title 2
of the Government Code  , the operator may obtain judicial
review of the decision pursuant to Section 11523 of the Government
Code.
   SEC. 28.   SEC. 24.   Section 3767 of
the Public Resources Code is repealed.
   SEC. 29.   SEC. 25.   Section 3767 is
added to the Public Resources Code, to read:
   3767.  When an operator seeks judicial review of a decision of the
director  , including a decision  following a
hearing conducted in accordance with Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code, the court shall hear the cause on the record before the
director or an administrative law judge. New or additional evidence
shall not be introduced in court. The court's inquiry shall extend to
whether the director acted without or in excess of jurisdiction,
whether there was a fair hearing, and whether there is any
prejudicial abuse of discretion. Abuse of discretion is established
if the administrative proceeding has not been conducted in the manner
required by law, the decision is not supported by the findings, or
the findings are not supported by substantial evidence in light of
the whole record.
   SEC. 30.   SEC. 26.   Section 3768 of
the Public Resources Code is repealed.
   SEC. 31.   SEC. 27.   Section 3768 is
added to the Public Resources Code, to read:
   3768.  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 3766, 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 pursuant to Section 3772.
   SEC. 32.   SEC. 28.   The director may
adopt emergency regulations for the purposes of implementing Sections
3225, 3236.5, 3350, 3351,  3352, 3353,  3354, 3355,
3356, 3743, 3744, 3762, 3763,  3764, 3765,  3766,
3767, and 3768. Any emergency regulations, if adopted, shall be
adopted in accordance with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code, and
for the purposes of that chapter, including Section 11349.6 of the
Government Code, the adoption of these regulations is an emergency
and shall be considered by the Office of Administrative Law as
necessary for the immediate preservation of the public peace, health
and safety, and general welfare. Notwithstanding Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code, including subdivision (e) of Section 11346.1 of
the Government Code, any emergency regulations adopted pursuant to
this section shall be filed with, but not be repealed by, the Office
of Administrative Law and shall remain in effect until revised by the
director.
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