BILL ANALYSIS �
AB 1966
Page 1
ASSEMBLY THIRD READING
AB 1966 (Ma)
As Introduced February 23, 2012
Majority vote
NATURAL RESOURCES 8-0
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|Ayes:|Chesbro, Knight, Lara, | | |
| |Dickinson, Halderman, | | |
| |Huffman, Monning, Skinner | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Beginning January 1, 2014, requires an oil and gas
well operator to provide a surface land owner with a 10-day
written notice of intent to enter the surface land owner's
property for the purpose of extracting oil, gas, or minerals.
EXISTING LAW :
1)Requires the Division of Oil, Gas and Geothermal Resources in
the Department of Conservation to supervise the drilling,
operation, maintenance and abandonment of oil and gas wells,
production facilities, and pipelines to prevent damage to
life, health, property, underground and surface waters, and
natural resources, among other things.
2)Requires an owner of mineral rights in real property to give a
written notice to the surface owner prior to the first entry
upon the real property to prospect for, mine, or extract any
mineral. If the mineral rights owner has not complied with
this notice requirement, the surface owner may request a court
to enjoin the prospecting, mining, or extracting operation
until the mineral rights owner has complied.
FISCAL EFFECT : Unknown. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS : According to the author:
In instances where surface ownership and sub-surface
(mineral) ownership is different, the sub-surface
owner may enter the surface owner's property at any
AB 1966
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point after providing an initial notice upon entry at
the first instance to prospect for or extract any
mineral �citation]. However, the notice �requirement]
is very limited and does not include any specifics
regarding timing. At a minimum, surface owners should
be provided advance notice when well operators plan to
enter the property for purposes of extraction and of
the surface owners' right to remediate contamination
to soil or groundwater. This is critical given the
potential for damage to surface resources, such as
crops, groundwater and worker safety.
This bill requires well operators to provide surface
owner �notice] 10 days prior to entering the surface
owner's property for purposes of extraction of oil,
gas or minerals. The bill also requires the well
operators to provide a copy of the recorded short form
or memorandum of oil, gas, or mineral lease with the
notice. In the event that a surface owner cannot be
located or determined then the well operator can
provide the notice via publication.
This bill is essentially the same bill as SB 550 (Florez) of
2010, which was vetoed by Governor Schwarzenegger with the
following message:
This bill requires an oil and gas operator to provide
to the surface owner a 10-day written notice of the
intent to enter the surface owner's property for the
purpose of the extraction of underlying oil, gas, or
minerals. This bill also requires the operator to
provide to the surface owner a copy of the applicable
recorded short form or memorandum of oil, gas, or
minerals lease within 10 days prior to entering the
property.
The Department of Conservation (Department) does not
currently resolve mineral rights or surface rights
disputes. But this bill would create an expectation
on the part of the landowner that the Department will
now regulate in this arena. This means that
violations of the provisions of the bill could be
subject to the imposition of penalties by the
Department. In essence, this bill creates a
AB 1966
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regulatory program in search of a problem. These
disputes should be resolved in the courts, not through
the Department's enforcement processes.
For this reason, I am unable to sign this bill.
The author intends to use this bill as a vehicle for two
separate purposes. The first purpose is to reinstate a
sunsetted fee that was collected from oil and gas well operators
from March 1, 2006 to January 1, 2008, to fund the state's Acute
Orphan Well program. The second purpose is to establish the
"Surface Owner Protection Act of 2012," which will, among other
things, require an oil and gas operator to provide just
compensation to a surface estate owner for any personal injury,
property damage, and interference arising from the operator's
surface disturbance activities.
Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092
FN: 0003538