BILL NUMBER: SB 550	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 21, 2010
	AMENDED IN ASSEMBLY  APRIL 8, 2010
	AMENDED IN ASSEMBLY  AUGUST 31, 2009
	AMENDED IN ASSEMBLY  AUGUST 17, 2009
	AMENDED IN ASSEMBLY  JULY 9, 2009
	AMENDED IN SENATE  MAY 20, 2009

INTRODUCED BY   Senator Florez
   (Coauthor: Senator Romero)

                        FEBRUARY 27, 2009

   An act to add  Sections 3208.5 and 3986  
Section 3205.7  to the Public Resources Code, relating to
natural resources.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 550, as amended, Florez. Natural resources: oil and gas:
 mining:  drilling.
   Existing law regulates oil and gas activities  and mining
activities  . Existing law requires an operator of an oil
and gas well to file with the State Oil and Gas Supervisor certain
indemnity bonds.
   This bill would require an operator of an oil and gas operation
 or mining operation  to have insurance or obtain an
indemnity bond in an amount and kind reasonably expected to secure
the costs of cleanup for any adverse environmental impact that could
be expected from the operator's drilling activity. The bill would
require the insurance or indemnity bond amount to be at least
$10,000,000, and in the case where the drilling is within 1,000 feet
of groundwater, at least $25,000,000. The bill would also require an
operator of an oil and gas operation  or mining operation
 to disclose to the owner of surface rights any agreement
between the operator and a drilling company. The bill would make an
operator drilling on farmland responsible for compensating the
landowners for surface damage to crops and other improvements caused
during the drilling.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section  3208.5   3205.7  is
added to the Public Resources Code, to read:
    3208.5.   3205.7.   (a) An operator
shall file with the supervisor evidence of insurance or an indemnity
bond in an amount and kind reasonably expected to secure the total
costs of cleanup of any adverse environmental impact that could be
expected to result from drilling, including the potential for
drilling accidents, negligent drilling activity, or both. The
indemnity bond or insurance policy shall be in an amount of not less
than ten million dollars ($10,000,000). In the case of subsurface
drilling within 1,000 feet of groundwater, the indemnity bond or
insurance policy shall be in an amount of not less than twenty-five
million dollars ($25,000,000), and shall specifically cover damage to
groundwater.
   (b) An operator shall provide to the owner of surface rights
written disclosure of any agreement between the operator and a
drilling company within 10 days of the execution of the agreement.
   (c) In the case of drilling on farmland, an operator shall be
responsible for compensating the landowners for surface damage to
crops and all other improvements caused during the drilling. 

  SEC. 2.    Section 3986 is added to the Public
Resources Code, to read:
   3986.  (a) An operator shall file with the supervisor evidence of
insurance or an indemnity bond in an amount and kind reasonably
expected to secure the total costs of cleanup of any adverse
environmental impact that could be expected to result from drilling,
including the potential for drilling accidents, negligent drilling
activity, or both. The indemnity bond or insurance policy shall be in
an amount of not less than ten million dollars ($10,000,000). In the
case of subsurface drilling within 1,000 feet of groundwater, the
indemnity bond or insurance policy shall be in an amount of not less
than twenty-five million dollars ($25,000,000), and shall
specifically cover damage to groundwater.
   (b) An operator shall provide to the owner of surface rights
written disclosure of any agreement between the operator and a
drilling company within 10 days of the execution of the agreement.
   (c) In the case of drilling on farmland, an operator shall be
responsible for compensating the landowners for surface damage to
crops and all other improvements caused during the drilling.