BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2453|
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THIRD READING
Bill No: AB 2453
Author: Tran (R)
Amended: 8/17/10 in Senate
Vote: 21
SENATE NATURAL RES. & WATER COMMITTEE : 8-0, 6/22/10
AYES: Pavley, Cogdill, Hollingsworth, Huff, Lowenthal,
Padilla, Simitian, Wolk
NO VOTE RECORDED: Kehoe
SENATE JUDICIARY COMMITTEE : 4-0, 6/29/10
AYES: Corbett, Harman, Hancock, Leno
NO VOTE RECORDED: Walters
SENATE APPROPRIATIONS COMMITTEE : 11-0, 8/12/10
AYES: Kehoe, Ashburn, Alquist, Corbett, Emmerson, Leno,
Price, Walters, Wolk, Wyland, Yee
ASSEMBLY FLOOR : 76-0, 6/2/10 - See last page for vote
SUBJECT : Oil and gas: operations: enforcement actions
SOURCE : Department of Conservation
DIGEST : This bill clarifies the judicial standard of
review for an enforcement action of the State Oil and Gas
Supervisor, and expands procedural safeguards for an
administrative appeal of an enforcement action, including
the use of the Office of Administrative Hearings.
CONTINUED
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ANALYSIS :
Existing law:
1. Creates the Division of Oil, Gas, and Geothermal
Resources in the Department of Corporations (DOC).
2. Requires the State Oil and Gas Supervisor (Supervisor)
of the Division of Oil, Gas, and Geothermal Resources to
supervise the drilling, operation, maintenance, and
abandonment of oil and gas and geothermal wells, tanks
and facilities, including certain pipelines, to prevent
damage to life, health, property, and natural resources;
damage to underground oil and gas or geothermal
deposits; loss of oil, gas, or reservoir energy; and
damage to underground and surface waters.
3. Requires the Supervisor to order tests or remedial work
necessary to prevent damage to life, health, property,
and natural resources; to protect oil and gas or
geothermal deposits from damage; to prevent the escape
of water into underground formations; or to prevent the
infiltration of detrimental substances into underground
or surface water.
4. Requires a lessor, lessee, operator, or owner of a well,
rig or derrick, within 10 days of the date of service of
an order above, to comply with the order or appeal it to
the Director of DOC. Due process provisions, including
timelines for a hearing, written decision, and judicial
review are provided.
5. Requires any charge, including penalty and interest,
imposed by the Director of DOC to constitute a lien on
real or personal property if an operator does not seek
judicial review of an order or the Director's order is
affirmed by a court.
This bill:
1. Makes numerous changes to the appeal process and
procedures for operators of oil, gas, and geothermal
wells, as specified.
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2. Requires 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.
3. Requires 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.
4. Provides for review of an order of the Supervisor
imposing a civil penalty by the Director, revises the
requirements for filing a notice of appeal, provides
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,
requires an expedited hearing before the Director.
5. Requires the Division of Oil, Gas, and Geothermal
Resources in DOC to reimburse an operator for required
remedial work if an order is invalidated on appeal, as
determined in a hearing before the Director.
6. Requires all certain appeals to be heard in a formal
hearing process before an administrative law judge,
instead of in an informal hearing before the Director of
DOC, except for certain emergency orders, and specifies
certain procedures for an informal hearing before the
Director, including the conversion of an informal
hearing and imposes specified requirements with regard
to an appeal of an emergency order.
7. Revises the scope of the judicial review of an appealed
order.
Background
Within the DOC is the Division of Oil, Gas, and Geothermal
Resources, headed by the State Oil and Gas Supervisor. The
Supervisor is responsible for overseeing the drilling,
operation, maintenance, and removal or abandonment of
tanks, facilities, wells, and certain pipelines associated
with oil and gas production and geothermal resources as
specified in Chapter 1 (commencing with Section 3000) and
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Chapter 6 (commencing with Section 3800) of Division 3 of
the Public Resources Code, respectively.
The Supervisor is required to order tests or remedial work
to prevent damage to life, health, property, and natural
resources; damage to underground oil and gas or geothermal
deposits; loss of oil, gas, or reservoir energy; and damage
to underground and surface waters. These enforcement
orders must been in writing and must specify the conditions
that need to be remedied and the associated necessary work.
Within 10 days of the service of an order, the owner or
operator must either begin a good faith effort to comply
with the order or file an appeal to the Director of DOC.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Additional legal costs $145 $145
$145Special*
According to the Assembly Appropriations Committee, DOC
estimates it will need one staff counsel position, at an
approximate cost of $145,000 a year, to represent the
Division of Oil, Gas, and Geothermal Resources in both
informal and formal hearings.
SUPPORT : (Unable to verify at time of writing)
Department of Conservation (source)
Western States Petroleum Association
ARGUMENTS IN SUPPORT : According to the author, "Because
certain procedural safeguards are not in place for those
appealing orders, courts must independently determine
whether certain enforcement actions are merited, forgoing
the regulatory expertise of DOGGR [Division of Oil, Gas,
and Geothermal Resources]. Legislation is necessary to
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clarify the standard of review to be used by courts in
reviewing such actions. This bill will give operators
subject to regulatory action greater protection by
providing the additional due process safeguards not
currently in statute."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall,
Bill Berryhill, Blakeslee, Block, Blumenfield, Bradford,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Logue, Bonnie
Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande,
Niello, Nielsen, Norby, V. Manuel Perez, Portantino,
Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio,
Swanson, Torlakson, Torres, Torrico, Tran, Villines,
Yamada, John A. Perez
NO VOTE RECORDED: Tom Berryhill, Lieu, Audra Strickland,
Vacancy
CTW:mw 8/17/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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