BILL ANALYSIS
AB 2453
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Date of Hearing: May 5, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2453 (Tran) - As Introduced: February 19, 2010
Policy Committee: Natural
ResourcesVote:9-0
Judiciary 10-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill creates due process safeguards and requires use of
certain evidentiary standards as they relate to decisions by the
Department of Conservation's (DOC's) Division of Oil, Gas and
Geothermal Resources (DOGGR). Specifically, this bill:
Relative to Appeals Processes
1)Eliminates current appeals process in which an appeal of an
enforcement order issued by the DOGGR supervisor may be made
by requesting a hearing to be conducted by the Director of
DOC.
2)Establishes a bifurcated process with "formal" and "informal"
processes for appealing enforcement actions administratively
before seeking judicial review.
Relative to Notification and Due Process
1)Requires an order of the DOGGR supervisor to clearly and
concisely state the acts the operator is charged with, the
statutory basis of the action, the associated penalties and
operator requirements, and the right of the operator to appeal
the action.
2)Extends the statute of limitations to file a lawsuit by 20
days, to a total of 30 days.
3)For an order that imposes penalties greater than $10,000 or
could terminate operations, provides a "formal" hearing to be
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conducted by an administrative law judge subject to the due
process requirements of the Administrative Procedures Act.
Relative to Evidentiary Standards
1)Requires the court to apply the "substantial evidence"
standard to its review the DOC director's decisions.
FISCAL EFFECT
DOC estimates it will need one staff counsel position, at an
approximate cost of $145,000 a year, to represent DOGGR in both
informal and formal hearings (special fund).
COMMENTS
1)Rationale . DOC-the bill's sponsor-intends this bill to
address shortcomings identified by a California appellate
court decision, Termo Company v. Luther. The sponsor
describes this bill as addressing the procedural concerns
raised by the court, as well as similar concerns that might be
raised by other courts in the future.
2)Background . The Division of Oil, Gas, and Geothermal
Resources within DOC regulates oil, gas, and geothermal well
operations throughout the state. The division issues
production permits and oversees the drilling, operation,
maintenance, as well as the plugging and abandonment of wells.
The DOGGR also provides detailed production reports on oil and
gas output in the state.
As described in the Judiciary Committee analysis:
In Termo Company v. Bridgett Luther (2008), 169 Cal. App.
4th 394, the California Court of Appeal (4th Dist.) held
that the trial court incorrectly applied a "substantial
evidence" standard of review when it upheld an order of the
Director requiring an operator to abandon 28 oil wells in
Huntington Beach that were allegedly posing a threat to
public health and safety and the environment. The Court of
Appeal held that the trial court was not justified in
departing from the normal "independent judgment" standard
of review, required by Code of Civil Procedure Section
1094.5, because the statute at issue (Public Resources Code
Sections 3350 et seq.) does not contain sufficient
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procedural safeguards that otherwise might allow the court
to employ a "substantial evidence" standard of review
(pursuant to Tex-Cal Land Management v. Agricultural Labor
Relations Board (1979) 24 Cal.3d 335.) The Court also
found that although the applicable Public Resource Code set
forth a standard of review to be applied, it does not
clearly express a "substantial evidence" standard, and
that, in any case, the requisite due process safeguards are
lacking that would justify use of that standard.
3)Support . This bill is supported by the Department of
Conservation (sponsor) and the Western States Petroleum
Association (WSPA), the members of which are subject to DOGGR
regulations and actions.
4)There is no registered opposition to this bill.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081