Amended in Senate March 27, 2014

Senate Bill No. 1132

Introduced by Senators Mitchell and Leno

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(Principal coauthor: Assembly Member Ammiano)

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(Coauthor: Assembly Member Stone)

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(Principal coauthors: Assembly Members Ammiano and Levine)

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(Coauthors: Senators DeSaulnier, Jackson, Lieu, and Wolk)

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(Coauthors: Assembly Members Bloom, Chesbro, Gordon, Stone, and Williams)

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February 20, 2014

An act to amend begin delete Section end delete begin insert Sections 3157 and end insert 3160 of, begin delete to add Sections 3160.1 and 3160.2 to, end delete and to begin delete add and end delete repeal begin insert and add end insert Section 3161 of, the Public Resources Code, relating to oil and gas.

LEGISLATIVE COUNSEL’S DIGEST

SB 1132, as amended, Mitchell. Oil and gas: well stimulation treatments.

Under existing law, the Division of Oil, Gas, and Geothermal Resources in the Department of Conservation regulates the drilling, operation, maintenance, stimulation, and abandonment of oil and gas wells in the state. The State Oil and Gas Supervisor, or supervisor, supervises the drilling, operation, maintenance, stimulation, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities related to oil and gas production within an oil and gas field regarding safety and environmental damage. Existing law requires an operator, prior to performing a well stimulating treatment begin insert , as defined, end insert on a well, to obtain approval from the supervisor or district deputy. Under existing law, a person who violates any prohibition specific to the regulation of oil or gas operations is guilty of a misdemeanor.

Existing law requires the Secretary of the Natural Resources Agency, on or before January 1, 2015, to cause to be conducted, and completed, an independent scientific study on well stimulation treatments, including acid well stimulation and hydraulic fracturing treatments.

This bill begin insert would revise the definition of “well stimulation treatment.” The bill end insert would require the scientific study to consider additional elements, including, among other things, evaluating various potential direct, indirect, and cumulative health and environmental effects of onshore and offshore well stimulation and well stimulation treatment-related activities, as specified. The bill would also prohibit all well stimulation treatments until the Secretary of the Natural Resources Agency convenes a committee to review the scientific study, as specified, the Governor issues findings that specific measures are in place to ensure that well stimulation treatments do not pose a risk to, or impairment of, the public health and welfare or to the environmental and economic sustainability of the state, and, if applicable, those findings are affirmed by judicial review, as specified. begin delete The bill would also require the division to adopt a formal process to resolve any claims with respect to vested rights, as specified. end delete begin insert The bill would require a person claiming a vested right to perform a well stimulation treatment to seek a determination from the Secretary of the Natural Resources Agency before performing the well stimulation treatment during the time period in which the prohibition is in effect. end insert Because a violation of the bill’s requirements would be a crime, the bill would impose a state-mandated local program.

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.  

begin insert (a) end insert begin insert   end insert The Legislature finds and declares all of the
following:

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(a) It is the intent of the Legislature in enacting this act to protect
the public health and welfare of the state.

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(b)

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begin insert (1) end insert  The begin delete actual and potential risks of well stimulation are
currently unknown because the end delete state has failed to appropriately
monitor or track well stimulation activity and to study its effects.

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(c)

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begin insert (2) end insert  Well stimulation and well stimulation-related activities
begin insert release harmful air pollutants, including methanol, crystalline
silica dust, hydrochloric and hydrofluoric acid, xylene,
2-butoxyethanol, naphthalene, ethylbenzene, 2-propanol, volatile
organic compounds, and particulate matter, which end insert have an begin insert adverse end insert
impact on the state’s air begin delete quality, water quality and supply, soil
quality, land use patterns, greenhouse gas emissions, seismicity,
worker safety, social instability, economic instability, and public
health and safety. end delete begin insert end insert begin insert quality and are detrimental to public health and
safety. Many parts of California already suffer from poor air
quality. end insert

begin insert

(3) Well stimulation and well stimulation-related activities
involve the use of hundreds of chemicals, many of which are known
to be carcinogenic or are otherwise harmful to human health.
These chemicals, along with dangerous chemicals present in the
oil and gas formation, threaten to contaminate groundwater and
surface water resources through numerous potential pathways.

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(4) Exposure to the chemicals used in well stimulation and well
stimulation-related activities poses a widespread and significant
risk to public health and safety and the environment. Studies have
shown an increase in birth defects and illnesses in communities
located close to well stimulation operations.

end insert begin insert

(5) Well stimulation and well stimulation-related activities
involve the use of substantial amounts of freshwater, which cannot
be reused for other purposes once it is mixed with well stimulation
fluid chemicals. California is currently experiencing one of the
worst droughts in the state’s history and faces a scarcity of
freshwater resources.

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(6) Well stimulation and well stimulation-related activities result
in the emission of a substantial amount of greenhouse gases, such
as carbon dioxide and methane. The construction, drilling,
extraction, refinement, and end-use combustion of oil and gas
produces vast amounts of greenhouse gas; furthermore, well
stimulation and well stimulation-related activities may lead to a
dramatic increase in the overall amount of recoverable oil and
gas in the state. The expansion of oil and gas activity and the
process of well stimulation both threaten to undermine the state’s
goal of reducing greenhouse gas emissions.

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(7) The disposal of wastewater resulting from well stimulation
and well stimulation-related activities in other states has been
linked to increased earthquake activity.

end insert begin insert

(8) Fracking and other forms of well stimulation occur
disproportionately near communities consisting largely of people
of color, low-income households, non-English speaking households,
and persons already experiencing high levels of water or air
pollution or water scarcity.

end insert begin insert

(9) Well stimulation and well stimulation-related activities
directly and indirectly harm wildlife, including species that are
protected under federal and state endangered species laws.

end insert begin insert

(b) It is the intent of the Legislature in enacting this act to
protect the public health and welfare of the state.

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begin insert SEC. 2. end insert   

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begin insert Section 3157 of the end insert begin insert Public Resources Code end insert begin insert is amended
to read: end insert

3157.  

(a) For purposes of this article, “well stimulation
treatment” means any treatment of a well designed to enhance oil
and gas production or recovery by increasing the permeability of
the begin delete formation. end delete begin insert formation or the flow of fluid through the well. end insert Well
stimulation treatments include, but are not limited to, hydraulic
fracturing treatments and acid well stimulation treatments.

(b) Well stimulation treatments do not include steam flooding,
water flooding, or cyclic steaming and do not include routine well
cleanout work, routine well maintenance, routine removal of
formation damage due to drilling, bottom hole pressure surveys,
or routine activities that do not affect the integrity of the well or
the formation.

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(c) Well stimulation treatments do not include gas storage
projects that are subject to Section 1742.9 of Title 14 of the
California Code of Regulations, but shall include well stimulation
treatments applied to gas storage projects to increase the flow of
gas.

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begin delete SEC. 2. end delete
begin insert SEC. 3. end insert   

Section 3160 of the Public Resources Code is amended
to read:

3160.  

(a) The Secretary of the Natural Resources Agency shall
cause to be conducted, and completed, an independent scientific
study on well stimulation treatments, including, but not limited to,
hydraulic fracturing and acid well stimulation treatments. The
scientific study shall evaluate the hazards and risks and potential
hazards and risks that well stimulation treatments and well
stimulation treatment-related activities pose to natural resources
and public, occupational, and environmental health and safety.
The scientific study shall do all of the following:

(1) Follow the well-established standard protocols of the
scientific profession, including, but not limited to, the use of
recognized experts, peer review, and publication. The study shall
be based solely on the best available scientific, health,
environmental, and statistical information.

(2) (A) Identify all onshore areas with existing and potential
conventional and unconventional oil and gas reserves begin insert and gas
storage projects end insert where well stimulation treatments are likely to
spur or enable oil and gas exploration and begin delete production. end delete begin insert production,
or gas storage. end insert

(B) Identify offshore areas, within the jurisdiction of the
division, with existing and potential conventional and
unconventional oil and gas reserves where well stimulation
treatments are likely to spur or enable oil and gas exploration and
production.

(3) (A) Evaluate all aspects and effects of well stimulation
treatments, including, but not limited to, the well stimulation
treatment, additive and water transportation to and from the well
site, mixing, storage, and handling of the well stimulation treatment
fluids and additives onsite, the use and potential for use of nontoxic
additives and the use or reuse of treated or produced water in well
stimulation treatment fluids, and flowback fluids and the handling,
treatment, and disposal of flowback fluids and other materials, if
any, generated by the treatment. Specifically, the potential for the
use of recycled water in well stimulation treatments, including
appropriate water quality requirements and available treatment
technologies, shall be evaluated. Well stimulation treatments
include, but are not limited to, hydraulic fracturing and acid well
stimulation treatments.

(B) Review and evaluate acid matrix stimulation treatments,
including the range of acid volumes applied per treated foot and
total acid volumes used in treatments, types of acids, acid
concentration, and other chemicals used in the treatments.

(C) Evaluate all potential direct, indirect, and cumulative health
and environmental effects of onshore well stimulation treatments
and well stimulation treatment-related activities.

(D) Evaluate all potential direct, indirect, and cumulative health
and environmental effects of offshore well stimulation treatments
and well stimulation treatment-related activities that are within the
jurisdiction of the division.

(E) Evaluate all direct, indirect, and cumulative health and
environmental effects of the full lifecycle of oil and gas
exploration, development, and production, including flowback
fluids and other byproducts that would result from allowing well
stimulation treatments within the state.

(F) Evaluate the extent of the increase in oil and gas
development, refining processes, and end-use combustion that
would result from allowing well stimulation treatments within the
state.

(4) (A) Consider potential water contamination, including
groundwater and surface water, potential depletion of water
resources, potential effects on water sustainability, and the ultimate
disposition, transport, transformation, and toxicology of well
stimulation treatments, including acid well stimulation fluids,
hydraulic fracturing fluids, and waste hydraulic fracturing fluids,
and acid well stimulation in the environment.

(B) Consider surface contamination, potential noise and light
pollution, as well as actual and potential induced seismicity.

(C) Consider atmospheric emissions, including potential
greenhouse gas emissions, the potential degradation of air quality,
and the potential impacts of well stimulation and increased oil and
gas activity on the state’s efforts to meet its greenhouse gas
reduction targets under the California Global Warming Solutions
Act of 2006 (Division 25.5 (commencing with Section 38500) of
the Health and Safety Code).

(5)  Identify and evaluate the geologic features present in the
vicinity of a well, including the well bore, that should be taken
into consideration in the design of a proposed well stimulation
treatment.

(6) Identify and evaluate all of the following:

(A) The potential impacts of well stimulation treatments on
private begin delete property and land use, end delete begin insert property, end insert including home values
and direct damage to property and land.

(B) The potential human health risk for each chemical used in
well stimulation treatments.

(C) The potential economic costs and harms of increased oil
and gas operations in the state as a result of well stimulation
treatments, including, but not limited to, the resulting economic
costs to the agricultural sector and the tourism industry.

(D) The potential effects on communities most likely to be
negatively affected by the impacts of well stimulation, including,
but not limited to, all of the following:

(i) Communities consisting largely of people of color.

(ii) Communities consisting largely of low-income individuals.

(iii) Communities consisting largely of non-English-speaking
households.

(iv) Communities already experiencing high levels of water or
air pollution, or water scarcity.

(E) Potential harm to the public health and welfare of the state’s
residents and the state’s environment, both cumulatively and
specific to each region where well stimulation treatments may
occur.

(F) The potential effect of increased traffic due to increased oil
and gas activity as a result of well stimulation treatments, including
air emissions from vehicle traffic, and road expansion and
deterioration.

(G) The potential effect on pipeline infrastructure due to
increased oil and gas activity as a result of well stimulation
treatments, including potential pipeline leakage.

(H) Potential impacts on wildlife, including harm to endangered
or threatened species, native plants, and habitat, including habitat
fragmentation.

(I) Whether existing emergency planning, procedures, and
resources adequately and fully ensure public safety in the event
of an emergency.

(J) Potential risks to worker safety.

(7) Include a hazard assessment and risk analysis addressing
occupational and environmental exposures to well stimulation
treatments, including hydraulic fracturing treatments, hydraulic
fracturing treatment-related processes, acid well stimulation
treatments, acid well stimulation treatment-related processes, and
the corresponding impacts on public health and safety with the
participation of the Office of Environmental Health Hazard
Assessment.

(8) Clearly identify where additional information is necessary
to inform and improve the analyses.

(b) (1) Prior to the issuance of the final scientific study, the
division shall conduct public hearings throughout the state to obtain
additional public comment. Public notice of a begin delete hearings end delete begin insert hearing end insert
shall be provided at least 30 days prior to any hearing.

(2) All relevant notices and hearing documents shall be made
available in non-English languages necessary to inform the public
of the opportunity to comment and to accommodate public
participation.

(c) The Secretary of the Natural Resources Agency shall notify
the Joint Legislative Budget Committee and the chairs of the
Assembly Natural Resources, Senate Environmental Quality, and
Senate Natural Resources and Water Committees on the progress
of the independent scientific study on well stimulation and related
activities. The first progress report shall be provided to the
Legislature on or before April 1, 2014, and progress reports shall
continue every four months thereafter until the independent study
is completed, including a peer review of the study by independent
scientific experts.

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(d) (1) (A) On or before January 1, 2015, the division, in
consultation with the Department of Toxic Substances Control,
the State Air Resources Board, the State Water Resources Control
Board, the Department of Resources Recycling and Recovery, and
any local air districts and regional water quality control boards
in areas where well stimulation treatments, including acid well
stimulation treatments and hydraulic fracturing treatments may
occur, shall adopt rules and regulations specific to well stimulation
treatments. The rules and regulations shall include, but are not
limited to, revisions, as needed, to the rules and regulations
governing construction of wells and well casings to ensure integrity
of wells, well casings, and the geologic and hydrologic isolation
of the oil and gas formation during and following well stimulation
treatments, and full disclosure of the composition and disposition
of well stimulation fluids, including, but not limited to, hydraulic
fracturing fluids, acid well stimulation fluids, and flowback fluids.

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(B) The rules and regulations shall additionally include
provisions for an independent entity or person to perform the
notification requirements pursuant to paragraph (6) of subdivision
(f), for the operator to provide for baseline and followup water
testing upon request as specified in paragraph (7) of subdivision
(f).

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(C) (i) In order to identify the acid matrix stimulation treatments
that are subject to this section, the rules and regulations shall
establish threshold values for acid volume applied per treated foot
of any individual stage of the well or for total acid volume of the
treatment, or both, based upon a quantitative assessment of the
risks posed by acid matrix stimulation treatments that exceed the
specified threshold value or values in order to prevent, as far as
possible, damage to life, health, property, and natural resources
pursuant to Section 3106.

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(ii) On or before January 1, 2020, the division shall review and
evaluate the threshold values for acid volume applied per treated
foot and total acid volume of the treatment, based upon data
collected in the state, for acid matrix stimulation treatments. The
division shall revise the values through the regulatory process, if
necessary, based upon the best available scientific information,
including the results of the independent scientific study pursuant
to subparagraph (B) of paragraph (3) of subdivision (a).

end insert begin insert

(2) Full disclosure of the composition and disposition of well
stimulation fluids, including, but not limited to, hydraulic fracturing
fluids and acid stimulation treatment fluids, shall, at a minimum,
include:

end insert begin insert

(A) The date of the well stimulation treatment.

end insert begin insert

(B) A complete list of the names, Chemical Abstract Service
(CAS) numbers, and maximum concentration, in percent by mass,
of each and every chemical constituent of the well stimulation
treatment fluids used. If a CAS number does not exist for a
chemical constituent, the well owner or operator may provide
another unique identifier, if available.

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(C) The trade name, the supplier, concentration, and a brief
description of the intended purpose of each additive contained in
the well stimulation treatment fluid.

end insert begin insert

(D) The total volume of base fluid used during the well
stimulation treatment, and the identification of whether the base
fluid is water suitable for irrigation or domestic purposes, water
not suitable for irrigation or domestic purposes, or a fluid other
than water.

end insert begin insert

(E) The source, volume, and specific composition and disposition
of all water, including, but not limited to, all water used as base
fluid during the well stimulation treatment and recovered from the
well following the well stimulation treatment that is not otherwise
reported as produced water pursuant to Section 3227. Any repeated
reuse of treated or untreated water for well stimulation treatments
and well stimulation treatment-related activities shall be identified.

end insert begin insert

(F) The specific composition and disposition of all well
stimulation treatment fluids, including waste fluids, other than
water.

end insert begin insert

(G) Any radiological components or tracers injected into the
well as part of, or in order to evaluate, the well stimulation
treatment, a description of the recovery method, if any, for those
components or tracers, the recovery rate, and specific disposal
information for recovered components or tracers.

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(H) The radioactivity of the recovered well stimulation fluids.

end insert begin insert

(I) The location of the portion of the well subject to the well
stimulation treatment and the extent of the fracturing or other
modification, if any, surrounding the well induced by the treatment.

end insert begin insert

(e) (1) Through the consultation process described in paragraph
(1) of subdivision (d), the division shall collaboratively identify
and delineate the existing statutory authority and regulatory
responsibility relating to well stimulation treatments and well
stimulation treatment-related activities of the Department of Toxic
Substances Control, the State Air Resources Board, any local air
districts, the State Water Resources Control Board, the Department
of Resources Recycling and Recovery, any regional water quality
control board, and other public entities, as applicable. This shall
specify how the respective authority, responsibility, and notification
and reporting requirements associated with well stimulation
treatments and well stimulation treatment-related activities are
divided among each public entity.

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(2) On or before January 1, 2015, the division shall enter into
formal agreements with the Department of Toxic Substances
Control, the State Air Resources Board, any local air districts
where well stimulation treatments may occur, the State Water
Resources Control Board, the Department of Resources Recycling
and Recovery, and any regional water quality control board where
well stimulation treatments may occur, clearly delineating
respective authority, responsibility, and notification and reporting
requirements associated with well stimulation treatments and well
stimulation treatment-related activities, including air and water
quality monitoring, in order to promote regulatory transparency
and accountability.

end insert begin insert

(3) The agreements under paragraph (2) shall specify the
appropriate public entity responsible for air and water quality
monitoring and the safe and lawful disposal of materials in
landfills, include trade secret handling protocols, if necessary,
and provide for ready public access to information related to well
stimulation treatments and related activities.

end insert begin insert

(4) Regulations, if necessary, shall be revised appropriately to
incorporate the agreements under paragraph (2).

end insert begin insert

(f) (1) Notwithstanding any other law or regulation, prior to
performing a well stimulation treatment, the operator shall apply
for a permit to perform a well stimulation treatment with the
supervisor or district deputy. The well stimulation treatment permit
application shall contain the pertinent data the supervisor requires
on printed forms supplied by the division or on other forms
acceptable to the supervisor. The information provided in the well
stimulation treatment permit application shall include, but is not
limited to, the following:

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(A) The well identification number and location.

end insert begin insert

(B) The time period during which the well stimulation treatment
is planned to occur.

end insert begin insert

(C) A water management plan that shall include all of the
following:

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(i) An estimate of the amount of water to be used in the
treatment. Estimates of water to be recycled following the well
stimulation treatment may be included.

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(ii) The anticipated source of the water to be used in the
treatment.

end insert begin insert

(iii) The disposal method identified for the recovered water in
the flowback fluid from the treatment that is not produced water
included in the statement pursuant to Section 3227.

end insert begin insert

(D) A complete list of the names, Chemical Abstract Service
(CAS) numbers, and estimated concentrations, in percent by mass,
of each and every chemical constituent of the well stimulation
fluids anticipated to be used in the treatment. If a CAS number
does not exist for a chemical constituent, the well owner or
operator may provide another unique identifier, if available.

end insert begin insert

(E) The planned location of the well stimulation treatment on
the well bore, the estimated length, height, and direction of the
induced fractures or other planned modification, if any, and the
location of existing wells, including plugged and abandoned wells,
that may be impacted by these fractures and modifications.

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(F) A groundwater monitoring plan. Required groundwater
monitoring in the vicinity of the well subject to the well stimulation
treatment shall be satisfied by one of the following:

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(i) The well is located within the boundaries of an existing oil
or gas field-specific or regional monitoring program developed
pursuant to Section 10783 of the Water Code.

end insert begin insert

(ii) The well is located within the boundaries of an existing oil
or gas field-specific or regional monitoring program developed
and implemented by the well owner or operator meeting the model
criteria established pursuant to Section 10783 of the Water Code.

end insert begin insert

(iii) Through a well-specific monitoring plan implemented by
the owner or operator meeting the model criteria established
pursuant to Section 10783 of the Water Code, and submitted to
the appropriate regional water board for review.

end insert begin insert

(G) The estimated amount of treatment-generated waste
materials that are not reported in subparagraph (C) and an
identified disposal method for the waste materials.

end insert begin insert

(2) (A) At the supervisor’s discretion, and if applied for
concurrently, the well stimulation treatment permit described in
this section may be combined with the well drilling and related
operation notice of intent required pursuant to Section 3203 into
a single combined authorization. The portion of the combined
authorization applicable to well stimulation shall meet all of the
requirements of a well stimulation treatment permit pursuant to
this section.

end insert begin insert

(B) Where the supervisor determines that the activities proposed
in the well stimulation treatment permit or the combined
authorization have met all of the requirements of Division 13
(commencing with Section 21000), and have been fully described,
analyzed, evaluated, and mitigated, no additional review or
mitigation shall be required.

end insert begin insert

(C) The time period available for approval of the portion of the
combined authorization applicable to well stimulation is subject
to the terms of this section, and not Section 3203.

end insert begin insert

(3) (A) The supervisor or district deputy shall review the well
stimulation treatment permit application and may approve the
permit if the application is complete. An incomplete application
shall not be approved.

end insert begin insert

(B) A well stimulation treatment or repeat well stimulation
treatment shall not be performed on any well without a valid permit
that the supervisor or district deputy has approved.

end insert begin insert

(C) In considering the permit application, the supervisor or
district deputy shall evaluate the quantifiable risk of the well
stimulation treatment.

end insert begin insert

(4) The well stimulation treatment permit shall expire one year
from the date that the permit is issued.

end insert begin insert

(5) Within five business days of issuing a permit to perform a
well stimulation treatment, the division shall provide a copy of the
permit to the appropriate regional water quality control board or
boards and to the local planning entity where the well, including
its subsurface portion, is located. The division shall also post the
permit on the publicly accessible portion of its Internet Web site
within five business days of issuing a permit.

end insert begin insert

(6) (A) It is the policy of the state that a copy of the approved
well stimulation treatment permit and information on the available
water sampling and testing be provided to every tenant of the
surface property and every surface property owner or authorized
agent of that owner whose property line location is one of the
following:

end insert begin insert

(i) Within a 1,500 foot radius of the wellhead.

end insert begin insert

(ii) Within 500 feet from the horizontal projection of all
subsurface portions of the designated well to the surface.

end insert begin insert

(B) (i) The well owner or operator shall identify the area
requiring notification and shall contract with an independent entity
or person who is responsible for, and shall perform, the notification
required pursuant to subparagraph (A).

end insert begin insert

(ii) The independent entity or person shall identify the
individuals notified, the method of notification, the date of the
notification, and a list of those notified, and shall provide this
information to the division.

end insert begin insert

(iii) The performance of the independent entity or person shall
be subject to review and audit by the division.

end insert begin insert

(C) A well stimulation treatment shall not commence before 30
calendar days after the permit copies pursuant to subparagraph
(A) are provided.

end insert begin insert

(7) (A) A property owner notified pursuant to paragraph (6)
may request water quality sampling and testing from a designated
qualified contractor on any water well suitable for drinking or
irrigation purposes and on any surface water suitable for drinking
or irrigation purposes as follows:

end insert begin insert

(i) Baseline measurements prior to the commencement of the
well stimulation treatment.

end insert begin insert

(ii) Followup measurements after the well stimulation treatment
on the same schedule as the pressure testing of the well casing of
the treated well.

end insert begin insert

(B) The State Water Resources Control Board shall designate
one or more qualified independent third-party contractor or
contractors that adhere to board-specified standards and protocols
to perform the water sampling and testing. The well owner or
operator shall pay for the sampling and testing. The sampling and
testing performed shall be subject to audit and review by the State
Water Resources Control Board or an applicable regional water
quality control board, as appropriate.

end insert begin insert

(C) The results of the water testing shall be provided to the
division, appropriate regional water quality control board, and
the property owner or authorized agent. A tenant notified pursuant
to paragraph (6) shall receive information on the results of the
water testing to the extent authorized by his or her lease and, where
the tenant has lawful use of the groundwater or surface water
identified in subparagraph (A), the tenant may independently
contract for similar groundwater or surface water testing.

end insert begin insert

(8) The division shall retain a list of the entities and property
owners notified pursuant to paragraphs (5) and (6).

end insert begin insert

(9) The operator shall provide notice to the division at least 72
hours prior to the actual start of the well stimulation treatment in
order for the division to witness the treatment.

end insert begin insert

(g) If a well stimulation treatment is performed, a supplier that
performs any part of the treatment or provides additives directly
to the operator for a well stimulation treatment shall furnish the
operator with information suitable for public disclosure needed
for the operator to comply with subdivision (h). This information
shall be provided as soon as possible but no later than 30 days
following the conclusion of the well stimulation treatment.

end insert begin insert

(h) (1) Within 60 days following cessation of a well stimulation
treatment, the operator shall post or cause to be posted to an
Internet Web site, designated or maintained by the division and
accessible to the public, all of the well stimulation fluid
composition and disposition information required to be collected
pursuant to the rules and regulations adopted under subdivision
(d), including well identification number and location. This shall
include the collected water quality data, which the operator shall
report electronically to the State Water Resources Control Board.

end insert begin insert

(2) (A) The division shall develop an Internet Web site for
operators to report the information required under this section.
The Internet Web site shall be capable of organizing the reported
information in a format, such as a spreadsheet, that allows the
public to easily search and aggregate, to the extent practicable,
each type of information required to be collected pursuant to
subdivision (d) using search functions on that Internet Web site.
The Internet Web site shall be functional within two years of the
Department of Technology’s approval of a feasibility study report
or appropriation authority to fund the development of the Internet
Web site, whichever occurs latest, but no later than January 1,
2016.

end insert begin insert

(B) The division may direct reporting to an alternative Internet
Web site developed by the Ground Water Protection Council and
the Interstate Oil and Gas Compact Commission in the interim
until approval or appropriate authority pursuant to subparagraph
(A) occur. Prior to the implementation of the division’s Internet
Web site, the division shall obtain the data reported by operators
to the alternative Internet Web site and make it available in an
organized electronic format to the public no later than 15 days
after it is reported to the alternative Internet Web site.

end insert begin insert

(i) The operator is responsible for compliance with this section.

end insert begin insert

(j) (1) All geologic features within a distance reflecting an
appropriate safety factor of the fracture zone for well stimulation
treatments that fracture the formation and that have the potential
to either limit or facilitate the migration of fluids outside of the
fracture zone shall be identified and added to the well history.
Geologic features include seismic faults identified by the California
Geologic Survey.

end insert begin insert

(2) For the purposes of this section, the “fracture zone” is
defined as the volume surrounding the well bore where fractures
were created or enhanced by the well stimulation treatment. The
safety factor shall be at least five and may vary depending upon
geologic knowledge.

end insert begin insert

(3) The division shall review the geologic features important to
assessing well stimulation treatments identified in the independent
study pursuant to paragraph (5) of subdivision (a). Upon
completion of the review, the division shall revise the regulations
governing the reporting of geologic features pursuant to this
subdivision accordingly.

end insert begin insert

(k) (1) Public disclosure of well stimulation treatment fluid
information claimed to contain trade secrets is governed by Section
1060 of the Evidence Code, or the Uniform Trade Secrets Act (Title
5 (commencing with Section 3426) of Part 1 of Division 4 of the
Civil Code), and the California Public Records Act (Chapter 3.5
(commencing with Section 6250) of Division 7 of Title 1 of the
Government Code).

end insert begin insert

(2) Notwithstanding any other law or regulation, none of the
following information shall be protected as a trade secret:

end insert begin insert

(A) The identities of the chemical constituents of additives,
including CAS identification numbers.

end insert begin insert

(B) The concentrations of the additives in the well stimulation
treatment fluids.

end insert begin insert

(C) Any air or other pollution monitoring data.

end insert begin insert

(D) Health and safety data associated with well stimulation
treatment fluids.

end insert begin insert

(E) The chemical composition of the flowback fluid.

end insert begin insert

(3) If a trade secret claim is invalid or invalidated, the division
shall release the information to the public by revising the
information released pursuant to subdivision (h). The supplier
shall notify the division of any change in status within 30 days.

end insert begin insert

(4) (A) If a supplier believes that information regarding a
chemical constituent of a well stimulation fluid is a trade secret,
the supplier shall nevertheless disclose the information to the
division in conjunction with a well stimulation treatment permit
application, if not previously disclosed, within 30 days following
cessation of well stimulation on a well, and shall notify the division
in writing of that belief.

end insert begin insert

(B) A trade secret claim shall not be made after initial disclosure
of the information to the division.

end insert begin insert

(C) To comply with the public disclosure requirements of this
section, the supplier shall indicate where the trade secret
information has been withheld and provide substitute information
for public disclosure. The substitute information shall be a list, in
any order, of the chemical constituents of the additive, including
CAS identification numbers. The division shall review and approve
the supplied substitute information.

end insert begin insert

(D) This subdivision does not permit a supplier to refuse to
disclose the information required pursuant to this section to the
division.

end insert begin insert

(5) In order to substantiate the trade secret claim, the supplier
shall provide information to the division that shows all of the
following:

end insert begin insert

(A) The extent to which the trade secret information is known
by the supplier’s employees, and others involved in the supplier’s
business and outside the supplier’s business.

end insert begin insert

(B) The measures taken by the supplier to guard the secrecy of
the trade secret information.

end insert begin insert

(C) The value of the trade secret information to the supplier
and its competitors.

end insert begin insert

(D) The amount of effort or money the supplier expended
developing the trade secret information and the ease or difficulty
with which the trade secret information could be acquired or
duplicated by others.

end insert begin insert

(6) If the division determines that the information provided in
support of a request for trade secret protection pursuant to
paragraph (5) is incomplete, the division shall notify the supplier
and the supplier shall have 30 days to complete the submission.
An incomplete submission does not meet the substantive criteria
for trade secret designation.

end insert begin insert

(7) If the division determines that the information provided in
support of a request for trade secret protection does not meet the
substantive criteria for trade secret designation, the department
shall notify the supplier by certified mail of its determination. The
division shall release the information to the public, but not earlier
than 60 days after the date of mailing the determination, unless,
prior to the expiration of the 60-day period, the supplier obtains
an action in an appropriate court for a declaratory judgment that
the information is subject to protection or for a preliminary
injunction prohibiting disclosure of the information to the public
and provides notice to the division of the court order.

end insert begin insert

(8) The supplier is not required to disclose the trade secret
information to the operator.

end insert begin insert

(9) Upon receipt of a request for the release of trade secret
information to the public, the following procedure applies:

end insert begin insert

(A) The division shall notify the supplier of the request in writing
by certified mail, return receipt requested.

end insert begin insert

(B) The division shall release the information to the public, but
not earlier than 60 days after the date of mailing the notice of the
request for information, unless, prior to the expiration of the 60-day
period, the supplier obtains an action in an appropriate court for
a declaratory judgment that the information is subject to protection
or for a preliminary injunction prohibiting disclosure of the
information to the public and provides notice to the division of
that action.

end insert begin insert

(10) The division shall develop a timely procedure to provide
trade secret information in the following circumstances:

end insert begin insert

(A) To an officer or employee of the division, the state, local
governments, including, but not limited to, local air districts, or
the United States, in connection with the official duties of that
officer or employee, to a health professional under any law for the
protection of health, or to contractors with the division or other
government entities and their employees if, in the opinion of the
division, disclosure is necessary and required for the satisfactory
performance of a contract, for performance of work, or to protect
health and safety.

end insert begin insert

(B) To a health professional in the event of an emergency or to
diagnose or treat a patient.

end insert begin insert

(C) In order to protect public health, to any health professional,
toxicologist, or epidemiologist who is employed in the field of
public health and who provides a written statement of need. The
written statement of need shall include the public health purposes
of the disclosure and shall explain the reason the disclosure of the
specific chemical and its concentration is required.

end insert begin insert

(D) A health professional may share trade secret information
with other persons as may be professionally necessary, in order
to diagnose or treat a patient, including, but not limited to, the
patient and other health professionals, subject to state and federal
laws restricting disclosure of medical records including, but not
limited to, Chapter 2 (commencing with Section 56.10) of Part 2.6
of Division 1 of the Civil Code.

end insert begin insert

(E) For purposes of this paragraph, “health professional”
means any person licensed or certified pursuant to Division 2
(commencing with Section 500) of the Business and Professions
Code, the Osteopathic Initiative Act, the Chiropractic Initiative
Act, or the Emergency Medical Services System and the Prehospital
Emergency Medical Care Personnel Act (Division 2.5 (commencing
with Section 1797) of the Health and Safety Code).

end insert begin insert

(F) A person in possession of, or with access to, confidential
trade secret information pursuant to the provisions of this
subdivision may disclose this information to any person who is
authorized to receive it. A written confidentiality agreement shall
not be required.

end insert begin insert

(l) A well granted confidential status pursuant to Section 3234
shall not be required to disclose well stimulation treatment fluid
information pursuant to subdivision (h) until the confidential status
of the well ceases. Notwithstanding the confidential status of a
well, it is public information that a well will be or has been subject
to a well stimulation treatment.

end insert begin insert

(m) The division shall perform random periodic spot check
inspections to ensure that the information provided on well
stimulation treatments is accurately reported, including that the
estimates provided prior to the commencement of the well
stimulation treatment are reasonably consistent with the well
history.

end insert begin insert

(n) Where the division shares jurisdiction over a well or the
well stimulation treatment on a well with a federal entity, the
division’s rules and regulations shall apply in addition to all
applicable federal laws and regulations.

end insert begin insert

(o) This article does not relieve the division or any other agency
from complying with any other provision of existing laws,
regulations, and orders.

end insert begin insert

(p) Well stimulation treatments used for routine maintenance
of wells associated with underground storage facilities where
natural gas is injected into and withdrawn from depleted or
partially depleted oil or gas reservoirs pursuant to subdivision (a)
of Section 3403.5 are not subject to this section.

end insert

begin delete

SEC. 3.  

Section 3160.1 is added to the Public Resources Code,
to read:

3160.1.  

(a) (1) (A) On or before January 1, 2015, the division,
in consultation with the Department of Toxic Substances Control,
the State Air Resources Board, the State Water Resources Control
Board, the Department of Resources Recycling and Recovery, and
any local air districts and regional water quality control boards in
areas where well stimulation treatments, including acid well
stimulation treatments and hydraulic fracturing treatments may
occur, shall adopt rules and regulations specific to well stimulation
treatments. The rules and regulations shall include, but are not
limited to, revisions, as needed, to the rules and regulations
governing construction of wells and well casings to ensure integrity
of wells, well casings, and the geologic and hydrologic isolation
of the oil and gas formation during and following well stimulation
treatments, and full disclosure of the composition and disposition
of well stimulation fluids, including, but not limited to, hydraulic
fracturing fluids, acid well stimulation fluids, and flowback fluids.

(B) The rules and regulations shall additionally include
provisions for an independent entity or person to perform the
notification requirements pursuant to paragraph (6) of subdivision
(a) of Section 3160.2, for the operator to provide for baseline and
followup water testing upon request as specified in paragraph (7)
of subdivision (a) of Section 3160.2.

(C) (i) In order to identify the acid matrix stimulation treatments
that are subject to this section, the rules and regulations shall
establish threshold values for acid volume applied per treated foot
of any individual stage of the well or for total acid volume of the
treatment, or both, based upon a quantitative assessment of the
risks posed by acid matrix stimulation treatments that exceed the
specified threshold value or values in order to prevent, as far as
possible, damage to life, health, property, and natural resources
pursuant to Section 3106.

(ii) On or before January 1, 2020, the division shall review and
evaluate the threshold values for acid volume applied per treated
foot and total acid volume of the treatment, based upon data
collected in the state, for acid matrix stimulation treatments. The
division shall revise the values through the regulatory process, if
necessary, based upon the best available scientific information,
including the results of the independent scientific study pursuant
to subparagraph (B) of paragraph (3) of subdivision (a) of Section
3160.

(2) Full disclosure of the composition and disposition of well
stimulation fluids, including, but not limited to, hydraulic fracturing
fluids and acid stimulation treatment fluids, shall, at a minimum,
include:

(A) The date of the well stimulation treatment.

(B) A complete list of the names, Chemical Abstract Service
(CAS) numbers, and maximum concentration, in percent by mass,
of each and every chemical constituent of the well stimulation
treatment fluids used. If a CAS number does not exist for a
chemical constituent, the well owner or operator may provide
another unique identifier, if available.

(C) The trade name, the supplier, concentration, and a brief
description of the intended purpose of each additive contained in
the well stimulation treatment fluid.

(D) The total volume of base fluid used during the well
stimulation treatment, and the identification of whether the base
fluid is water suitable for irrigation or domestic purposes, water
not suitable for irrigation or domestic purposes, or a fluid other
than water.

(E) The source, volume, and specific composition and
disposition of all water, including, but not limited to, all water
used as base fluid during the well stimulation treatment and
recovered from the well following the well stimulation treatment
that is not otherwise reported as produced water pursuant to Section
3227. Any repeated reuse of treated or untreated water for well
stimulation treatments and well stimulation treatment-related
activities shall be identified.

(F) The specific composition and disposition of all well
stimulation treatment fluids, including waste fluids, other than
water.

(G) Any radiological components or tracers injected into the
well as part of, or in order to evaluate, the well stimulation
treatment, a description of the recovery method, if any, for those
components or tracers, the recovery rate, and specific disposal
information for recovered components or tracers.

(H) The radioactivity of the recovered well stimulation fluids.

(I) The location of the portion of the well subject to the well
stimulation treatment and the extent of the fracturing or other
modification, if any, surrounding the well induced by the treatment.

(b) (1) Through the consultation process described in paragraph
(1) of subdivision (a), the division shall collaboratively identify
and delineate the existing statutory authority and regulatory
responsibility relating to well stimulation treatments and well
stimulation treatment-related activities of the Department of Toxic
Substances Control, the State Air Resources Board, any local air
districts, the State Water Resources Control Board, the Department
of Resources Recycling and Recovery, any regional water quality
control board, and other public entities, as applicable. This shall
specify how the respective authority, responsibility, and notification
and reporting requirements associated with well stimulation
treatments and well stimulation treatment-related activities are
divided among each public entity.

(2) On or before January 1, 2015, the division shall enter into
formal agreements with the Department of Toxic Substances
Control, the State Air Resources Board, any local air districts where
well stimulation treatments may occur, the State Water Resources
Control Board, the Department of Resources Recycling and
Recovery, and any regional water quality control board where well
stimulation treatments may occur, clearly delineating respective
authority, responsibility, and notification and reporting
requirements associated with well stimulation treatments and well
stimulation treatment-related activities, including air and water
quality monitoring, in order to promote regulatory transparency
and accountability.

(3) The agreements under paragraph (2) shall specify the
appropriate public entity responsible for air and water quality
monitoring and the safe and lawful disposal of materials in
landfills, include trade secret handling protocols, if necessary, and
provide for ready public access to information related to well
stimulation treatments and related activities.

(4) Regulations, if necessary, shall be revised appropriately to
incorporate the agreements under paragraph (2).

SEC. 4.  

Section 3160.2 is added to the Public Resources Code,
to read:

3160.2.  

(a) (1) Notwithstanding any other law or regulation,
prior to performing a well stimulation treatment, the operator shall
apply for a permit to perform a well stimulation treatment with
the supervisor or district deputy. The well stimulation treatment
permit application shall contain the pertinent data the supervisor
requires on printed forms supplied by the division or on other
forms acceptable to the supervisor. The information provided in
the well stimulation treatment permit application shall include, but
is not limited to, the following:

(A) The well identification number and location.

(B) The time period during which the well stimulation treatment
is planned to occur.

(C) A water management plan that shall include all of the
following:

(i) An estimate of the amount of water to be used in the
treatment. Estimates of water to be recycled following the well
stimulation treatment may be included.

(ii) The anticipated source of the water to be used in the
treatment.

(iii) The disposal method identified for the recovered water in
the flowback fluid from the treatment that is not produced water
included in the statement pursuant to Section 3227.

(D) A complete list of the names, Chemical Abstract Service
(CAS) numbers, and estimated concentrations, in percent by mass,
of each and every chemical constituent of the well stimulation
fluids anticipated to be used in the treatment. If a CAS number
does not exist for a chemical constituent, the well owner or operator
may provide another unique identifier, if available.

(E) The planned location of the well stimulation treatment on
the well bore, the estimated length, height, and direction of the
induced fractures or other planned modification, if any, and the
location of existing wells, including plugged and abandoned wells,
that may be impacted by these fractures and modifications.

(F) A groundwater monitoring plan. Required groundwater
monitoring in the vicinity of the well subject to the well stimulation
treatment shall be satisfied by one of the following:

(i) The well is located within the boundaries of an existing oil
or gas field-specific or regional monitoring program developed
pursuant to Section 10783 of the Water Code.

(ii) The well is located within the boundaries of an existing oil
or gas field-specific or regional monitoring program developed
and implemented by the well owner or operator meeting the model
criteria established pursuant to Section 10783 of the Water Code.

(iii) Through a well-specific monitoring plan implemented by
the owner or operator meeting the model criteria established
pursuant to Section 10783 of the Water Code, and submitted to
the appropriate regional water board for review.

(G) The estimated amount of treatment-generated waste
materials that are not reported in subparagraph (C) and an identified
disposal method for the waste materials.

(2) (A) At the supervisor’s discretion, and if applied for
concurrently, the well stimulation treatment permit described in
this section may be combined with the well drilling and related
operation notice of intent required pursuant to Section 3203 into
a single combined authorization. The portion of the combined
authorization applicable to well stimulation shall meet all of the
requirements of a well stimulation treatment permit pursuant to
this section.

(B) Where the supervisor determines that the activities proposed
in the well stimulation treatment permit or the combined
authorization have met all of the requirements of Division 13
(commencing with Section 21000), and have been fully described,
analyzed, evaluated, and mitigated, no additional review or
mitigation shall be required.

(C) The time period available for approval of the portion of the
combined authorization applicable to well stimulation is subject
to the terms of this section, and not Section 3203.

(3) (A) The supervisor or district deputy shall review the well
stimulation treatment permit application and may approve the
permit if the application is complete. An incomplete application
shall not be approved.

(B) A well stimulation treatment or repeat well stimulation
treatment shall not be performed on any well without a valid permit
that the supervisor or district deputy has approved.

(C) In considering the permit application, the supervisor shall
evaluate the quantifiable risk of the well stimulation treatment.

(4) The well stimulation treatment permit shall expire one year
from the date that the permit is issued.

(5) Within five business days of issuing a permit to perform a
well stimulation treatment, the division shall provide a copy of the
permit to the appropriate regional water quality control board or
boards and to the local planning entity where the well, including
its subsurface portion, is located. The division shall also post the
permit on the publicly accessible portion of its Internet Web site
within five business days of issuing a permit.

(6) (A) It is the policy of the state that a copy of the approved
well stimulation treatment permit and information on the available
water sampling and testing be provided to every tenant of the
surface property and every surface property owner or authorized
agent of that owner whose property line location is one of the
following:

(i) Within a 1,500 foot radius of the wellhead.

(ii) Within 500 feet from the horizontal projection of all
subsurface portions of the designated well to the surface.

(B) (i) The well owner or operator shall identify the area
requiring notification and shall contract with an independent entity
or person who is responsible for, and shall perform, the notification
required pursuant to subparagraph (A).

(ii) The independent entity or person shall identify the
individuals notified, the method of notification, the date of the
notification, a list of those notified, and shall provide a list of this
information to the division.

(iii) The performance of the independent entity or persons shall
be subject to review and audit by the division.

(C) A well stimulation treatment shall not commence before 30
calendar days after the permit copies pursuant to subparagraph (A)
are provided.

(7) (A) A property owner notified pursuant to paragraph (6)
may request water quality sampling and testing from a designated
qualified contractor on any water well suitable for drinking or
irrigation purposes and on any surface water suitable for drinking
or irrigation purposes as follows:

(i) Baseline measurements prior to the commencement of the
well stimulation treatment.

(ii) Followup measurements after the well stimulation treatment
on the same schedule as the pressure testing of the well casing of
the treated well.

(B) The State Water Resources Control Board shall designate
one or more qualified independent third-party contractor or
contractors that adhere to board-specified standards and protocols
to perform the water sampling and testing. The well owner or
operator shall pay for the sampling and testing. The sampling and
testing performed shall be subject to audit and review by the State
Water Resources Control Board or applicable regional water quality
control board, as appropriate.

(C) The results of the water testing shall be provided to the
division, appropriate regional water board, and the property owner
or authorized agent. A tenant notified pursuant to paragraph (6)
shall receive information on the results of the water testing to the
extent authorized by his or her lease and, where the tenant has
lawful use of the ground or surface water identified in subparagraph
(A), the tenant may independently contract for similar groundwater
or surface water testing.

(8) The division shall retain a list of the entities and property
owners notified pursuant to paragraphs (5) and (6).

(9) The operator shall provide notice to the division at least 72
hours prior to the actual start of the well stimulation treatment in
order for the division to witness the treatment.

(b) If a well stimulation treatment is performed, a supplier that
performs any part of the treatment or provides additives directly
to the operator for a well stimulation treatment shall furnish the
operator with information suitable for public disclosure needed
for the operator to comply with subdivision (c). This information
shall be provided as soon as possible but no later than 30 days
following the conclusion of the well stimulation treatment.

(c) (1) Within 60 days following cessation of a well stimulation
treatment, the operator shall post or cause to be posted to an
Internet Web site designated or maintained by the division and
accessible to the public all of the well stimulation fluid composition
and disposition information required to be collected pursuant to
rules and regulations adopted under subdivision (a) of Section
3160.1, including well identification number and location. This
shall include the collected water quality data, which the operator
shall report electronically to the State Water Resources Control
Board.

(2) (A) The division shall commence the process to develop
an Internet Web site for operators to report the information required
under this section. The Internet Web site shall be capable of
organizing the reported information in a format, such as a
spreadsheet, that allows the public to easily search and aggregate,
to the extent practicable, each type of information required to be
collected pursuant to subdivision (a) of Section 3160.1 using search
functions on that Internet Web site. The Internet Web site shall be
functional within two years of the Department of Technology’s
approval of a Feasibility Study Report or appropriation authority
to fund the development of the Internet Web site, whichever occurs
latest, but no later than January 1, 2016.

(B) The division may direct reporting to an alternative Internet
Web site developed by the Ground Water Protection Council and
the Interstate Oil and Gas Compact Commission in the interim
until approval or appropriation authority pursuant to subparagraph
(A) occur. Prior to the implementation of the division’s Internet
Web site, the division shall obtain the data reported by operators
to the alternative Internet Web site and make it available in an
organized electronic format to the public no later than 15 days
after it is reported to the alternative Web site.

(d) The operator is responsible for compliance with this section.

(e) (1) All geologic features within a distance reflecting an
appropriate safety factor of the fracture zone for well stimulation
treatments that fracture the formation and that have the potential
to either limit or facilitate the migration of fluids outside of the
fracture zone shall be identified and added to the well history.
Geologic features include seismic faults identified by the California
Geologic Survey.

(2) For the purposes of this section, the “fracture zone” is
defined as the volume surrounding the well bore where fractures
were created or enhanced by the well stimulation treatment. The
safety factor shall be at least five and may vary depending upon
geologic knowledge.

(3) The division shall review the geologic features important to
assessing well stimulation treatments identified in the independent
study pursuant to paragraph (5) of subdivision (a) of Section 3160.
Upon completion of the review, the division shall revise the
regulations governing the reporting of geologic features pursuant
to this subdivision accordingly.

(f) (1) Public disclosure of well stimulation treatment fluid
information claimed to contain trade secrets is governed by Section
1060 of the Evidence Code, or the Uniform Trade Secrets Act
(Title 5 (commencing with Section 3426) of Part 1 of Division 4
of the Civil Code), and the California Public Records Act (Chapter
3.5 (commencing with Section 6250) of Division 7 of Title 1 of
the Government Code).

(2) Notwithstanding any other law or regulation, none of the
following information shall be protected as a trade secret:

(A) The identities of the chemical constituents of additives,
including CAS identification numbers.

(B) The concentrations of the additives in the well stimulation
treatment fluids.

(C) Any air or other pollution monitoring data.

(D) Health and safety data associated with well stimulation
treatment fluids.

(E) The chemical composition of the flowback fluid.

(3) If a trade secret claim is invalid or invalidated, the division
shall release the information to the public by revising the
information released pursuant to subdivision (c). The supplier shall
notify the division of any change in status within 30 days.

(4) (A) If a supplier believes that information regarding a
chemical constituent of a well stimulation fluid is a trade secret,
the supplier shall nevertheless disclose the information to the
division in conjunction with a well stimulation treatment permit
application, if not previously disclosed, within 30 days following
cessation of well stimulation on a well, and shall notify the division
in writing of that belief.

(B) A trade secret claim shall not be made after initial disclosure
of the information to the division.

(C) To comply with the public disclosure requirements of this
section, the supplier shall indicate where trade secret information
has been withheld and provide substitute information for public
disclosure. The substitute information shall be a list, in any order,
of the chemical constituents of the additive, including CAS
identification numbers. The division shall review and approve the
supplied substitute information.

(D) This subdivision does not permit a supplier to refuse to
disclose the information required pursuant to this section to the
division.

(5) In order to substantiate the trade secret claim, the supplier
shall provide information to the division that shows all of the
following:

(A) The extent to which the trade secret information is known
by the supplier’s employees, others involved in the supplier’s
business and outside the supplier’s business.

(B) The measures taken by the supplier to guard the secrecy of
the trade secret information.

(C) The value of the trade secret information to the supplier and
its competitors.

(D) The amount of effort or money the supplier expended
developing the trade secret information and the ease or difficulty
with which the trade secret information could be acquired or
duplicated by others.

(6) If the division determines that the information provided in
support of a request for trade secret protection pursuant to
paragraph (5) is incomplete, the division shall notify the supplier
and the supplier shall have 30 days to complete the submission.
An incomplete submission does not meet the substantive criteria
for trade secret designation.

(7) If the division determines that the information provided in
support of a request for trade secret protection does not meet the
substantive criteria for trade secret designation, the department
shall notify the supplier by certified mail of its determination. The
division shall release the information to the public, but not earlier
than 60 days after the date of mailing the determination, unless,
prior to the expiration of the 60-day period, the supplier obtains
an action in an appropriate court for a declaratory judgment that
the information is subject to protection or for a preliminary
injunction prohibiting disclosure of the information to the public
and provides notice to the division of the court order.

(8) The supplier is not required to disclose trade secret
information to the operator.

(9) Upon receipt of a request for the release of trade secret
information to the public, the following procedure applies:

(A) The division shall notify the supplier of the request in
writing by certified mail, return receipt requested.

(B) The division shall release the information to the public, but
not earlier than 60 days after the date of mailing the notice of the
request for information, unless, prior to the expiration of the 60-day
period, the supplier obtains an action in an appropriate court for a
declaratory judgment that the information is subject to protection
or for a preliminary injunction prohibiting disclosure of the
information to the public and provides notice to the division of
that action.

(10) The division shall develop a timely procedure to provide
trade secret information in the following circumstances:

(A) To an officer or employee of the division, the state, local
governments, including, but not limited to, local air districts, or
the United States, in connection with the official duties of that
officer or employee, to a health professional under any law for the
protection of health, or to contractors with the division or other
government entities and their employees if, in the opinion of the
division, disclosure is necessary and required for the satisfactory
performance of a contract, for performance of work, or to protect
health and safety.

(B) To a health professional in the event of an emergency or to
diagnose or treat a patient.

(C) In order to protect public health, to any health professional,
toxicologist, or epidemiologist who is employed in the field of
public health and who provides a written statement of need. The
written statement of need shall include the public health purposes
of the disclosure and shall explain the reason the disclosure of the
specific chemical and its concentration is required.

(D) A health professional may share trade secret information
with other persons as may be professionally necessary, in order to
diagnose or treat a patient, including, but not limited to, the patient
and other health professionals, subject to state and federal laws
restricting disclosure of medical records including, but not limited
to, Chapter 2 (commencing with Section 56.10) of Part 2.6 of
Division 1 of the Civil Code.

(E) For purposes of this paragraph, “health professional” means
any person licensed or certified pursuant to Division 2
(commencing with Section 500) of the Business and Professions
Code, the Osteopathic Initiative Act, the Chiropractic Initiative
Act, or the Emergency Medical Services System and the
Prehospital Emergency Medical Care Personnel Act (Division 2.5
(commencing with Section 1797) of the Health and Safety Code).

(F) A person in possession of, or access to, confidential trade
secret information pursuant to the provisions of this subdivision
may disclose this information to any person who is authorized to
receive it. A written confidentiality agreement shall not be required.

(g) A well granted confidential status pursuant to Section 3234
shall not be required to disclose well stimulation treatment fluid
information pursuant to subdivision (c) until the confidential status
of the well ceases. Notwithstanding the confidential status of a
well, it is public information that a well will be or has been subject
to a well stimulation treatment.

(h) The division shall perform random periodic spot check
inspections to ensure that the information provided on well
stimulation treatments is accurately reported, including that the
estimates provided prior to the commencement of the well
stimulation treatment are reasonably consistent with the well
history.

(i) Where the division shares jurisdiction over a well or the well
stimulation treatment on a well with a federal entity, the division’s
rules and regulations shall apply in addition to all applicable federal
laws and regulations.

(j) This article does not relieve the division or any other agency
from complying with any other provision of existing laws,
regulations, and orders.

(k) Well stimulation treatments used for routine maintenance
of wells associated with underground storage facilities where
natural gas is injected into and withdrawn from depleted or partially
depleted oil or gas reservoirs pursuant to subdivision (a) of Section
3403.5 are not subject to this section.

end delete

begin delete SEC. 5. end delete
begin insert SEC. 4. end insert   

Section 3161 of the Public Resources Code is repealed.

begin delete SEC. 6. end delete
begin insert SEC. 5. end insert   

Section 3161 is added to the Public Resources Code,
to read:

3161.  

(a) All well stimulation treatments shall be prohibited
until the scientific study pursuant to Section 3160 is completed
and all of the requirements of this section are met.

(b) No later than six months after the scientific study is
complete, the Secretary of the Natural Resources Agency shall
convene a committee to review the scientific study. The committee
shall include a representative from all of begin insert the end insert following:

(1) The Natural Resources Agency.

(2) The California Environmental Protection Agency.

(3) The State Air Resources Control Board.

(4) The State Water Resources Control Board.

(5) The State Department of Public Health.

(c) (1) After reviewing the scientific study as required under
subdivision (b), the committee shall issue a tentative report,
available to the public, evaluating the scientific study using the
best scientific, health, environmental, and statistical information
available, that shall include, but is not limited to, all of the
following findings:

(A) Whether the scientific study is based solely on the best
scientific, health, environmental, and statistical information
available, and meets all of the requirements of subdivision (a) of
Section 3160.

(B) Whether the regulations adopted pursuant to begin insert subdivision
(d) of end insert Section begin delete 3160.1 end delete begin insert 3160 end insert are sufficient to ensure that the damage
and risks associated with well stimulation treatments, and the
increased oil and gas development as a result of these treatments,
do not pose a risk to, or impairment of, the public health and
welfare or the environmental and economic sustainability of the
state.

(C) Whether there are measures in place to ensure that well
stimulation treatments, and the increased oil and gas development
as a result of these treatments, will not impede progress for
achieving the greenhouse gas reduction targets under the California
Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code).

(D) Whether other specific measures are in place to ensure that
well stimulation treatments within the state do not pose a risk to,
or impairment of, the public health and welfare or the
environmental and economic sustainability of the state.

(2) The public shall have 60 days to submit comments to the
committee regarding the tentative report and the committee shall
give full consideration to all of the comments received.

(3) (A) If the findings in the report conclude that well
stimulation treatments pose a risk to, or impairment of, the public
health and welfare or to the environmental and economic
sustainability of the state, the committee may require an additional
study to address any areas of concern and the prohibition on well
stimulation treatments pursuant to subdivision (a) shall remain in
effect.

(B) If the findings in the report conclude that well stimulation
treatments do not pose a risk to, or impairment of, the public health
and welfare or to the environmental and economic sustainability
of the state, the committee shall certify the report as final.

(d) Upon certification by the committee, the report shall be
provided to the Governor and the appropriate committees of the
Legislature.

(e) (1) Upon receipt of the report, the Governor shall determine
whether specific measures are in place to ensure that well
stimulation treatments within the state do not pose a risk to, or
impairment of, the public health and welfare or to the
environmental and economic sustainability of the state, and shall
provide specific findings of this determination to the Legislature.

(2) If the Governor’s findings conclude that there are not specific
measures in place as described in paragraph (1), the prohibition
on well stimulation treatments pursuant to subdivision (a) shall
remain in effect.

(3) If the Governor’s findings conclude that there are specific
measures in place as described in paragraph (1), the prohibition
of well stimulation treatments pursuant to subdivision (a) shall
end on the date provided in subdivision (f).

(4) A person who submitted comments to the committee or
provided testimony at a hearing held by the division pursuant to
begin delete paragraph (9) of end delete subdivision begin delete (a) end delete begin insert (b) end insert of Section 3160 may seek
judicial review of the Governor’s findings within 90 days after the
date that the findings are issued. The Governor’s findings shall be
considered final when all pending legal challenges are resolved
and the Governor’s findings based on clear and convincing
begin delete evidence, end delete begin insert evidence end insert are affirmed.

(f) (1) This section shall become inoperative 90 days after the
date the Governor issues the findings pursuant to paragraph (3) of
subdivision (e) or, if judicial review pursuant to paragraph (4) of
subdivision (e) is requested, on the date the begin delete Governor’s findings
are end delete begin insert judicial decision affirming the Governor’s findings is end insert
considered begin delete final. end delete begin insert final and nonappealable. end insert

(2) This section shall be repealed on January 1 immediately
following the date it becomes inoperative under paragraph (1).

(g) (1) This section shall not be interpreted to impair or infringe
any vested right to conduct or continue to conduct a well
stimulation treatment.

begin delete

(2) The division shall adopt a formal process to determine
whether a person has a vested right to perform a well stimulation
treatment.

end delete begin delete

(3)

end delete

begin insert (2) end insert  A person claiming a vested right to perform a well
stimulation treatment has the burden of proof, by clear and
convincing evidence, that he or she had a vested right begin delete and may
request a public hearing with the division. end delete begin insert to perform a well
stimulation before January 1, 2015. The past or current ownership
or operation of an existing well does not create a vested right for
future well stimulation. The occurrence of past well stimulation
events does not create a vested right for future well stimulation.
The claimant shall submit to the Secretary of the Natural Resources
Agency all necessary evidence to demonstrate a vested right,
including, at minimum, all of the following: end insert

begin insert

(A) All necessary discretionary permits have been obtained and
the activity will not result in an intensification or expansion of the
permitted activity.

end insert begin insert

(B) The completion of substantial construction work in
preparation for well stimulation.

end insert begin insert

(C) The incurrence of substantial costs and liabilities in good
faith reliance on the division’s approval granted before January
1, 2015.

end insert begin insert

(D) Any other information deemed necessary by the secretary
to determine whether a vested right exists.

end insert begin insert

(3) A person claiming a vested right may request a public
hearing before the Secretary of the Natural Resources Agency.

end insert begin insert

(4) If a hearing is requested, the Natural Resources Agency
shall notify affected local governments and all known interested
parties of the date, time, and location of the public hearing and
post the same information to a publicly accessible part of the
agency’s Internet Web site at least 20 days in advance of the
hearing. Any member of the public may submit comments or
evidence regarding the existence of a vested right.

end insert begin delete

(4)

end delete

begin insert (5) end insert  A person claiming a vested right shall not perform a well
stimulation treatment until the begin delete division end delete begin insert Secretary end insert begin insert of the Natural
Resources Agency end insert makes a final determination that the person has
a vested right.

begin insert

(6) If the Secretary of the Natural Resources Agency determines,
by clear and convincing evidence, that a vested right exists, the
prohibition on well stimulation with respect to the claimant shall
apply after a reasonable amortization period, to be determined by
the secretary. If the secretary determines that there is no clear and
convincing evidence that a vested right exists, the secretary shall
deny the claim.

end insert begin insert

(7) (A) Any interested party may challenge the Secretary of the
Natural Resources Agency’s determination that a vested right
exists in superior court.

end insert begin insert

(B) The well owner or operator may challenge the secretary’s
determination that a vested right does not exist in the superior
court.

end insert begin insert

(h) The division shall not approve as complete any Interim Well
Stimulation Treatment Notice forms, or make any other approval
to authorize a well stimulation treatment, on or after January 1,
2015.

end insert begin insert

(i) This section does not preempt local government’s land use
authority to regulate or prohibit oil and gas operations, including
well stimulation treatments and related activities.

end insert

begin delete SEC. 7. end delete
begin insert SEC. 6. end insert   

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.