BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1966|
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THIRD READING
Bill No: AB 1966
Author: Ma (D)
Amended: 8/24/12 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 3-0, 7/3/12
AYES: Evans, Corbett, Leno
NO VOTE RECORDED: Harman, Blakeslee
ASSEMBLY FLOOR : 63-0, 5/31/12 - See last page for vote
SUBJECT : Natural resources: oil and gas drilling
SOURCE : Pacific Ag Management
DIGEST : This bill requires a mineral rights owner to
provide specified notices to the owner of real property if
the mineral rights owner intends to enter the real property
to undertake surface-disrupting or non-surface-disrupting
activities.
Senate Floor Amendments of 8/24/12 clarify notice
requirements to be given to real property owners.
ANALYSIS : Existing law requires the owner of mineral
rights in real property to give written notice to the owner
of the real property listed on the current local assessment
roll or lessee prior to the first entry upon the real
property to prospect for, mine, or extract any mineral.
(Civil Code (CIV) Section 848)
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Existing law requires the owner of mineral rights to give
the written notice by certified mail or have the notice
personally delivered to the real property owner, the
owner's representative, or lessee, and that the real
property owner, representative or lessee acknowledge in
writing the receipt of the notice. (CIV Section 848)
Existing law provides that if the mineral rights owner has
not complied with the notice requirement, the owner of the
real property may request a court to enjoin the
prospecting, mining, or extraction operation until the
mineral rights owner has complied with the notice
requirement. (CIV Section 848)
Existing law defines mineral rights as an interest in
minerals, regardless of character, whether fugacious or
nonfugacious, organic or inorganic, that is created by
grant or reservation, regardless of form, whether a fee or
lesser interest, mineral, royalty, or leasehold, absolute
or fractional, corporeal or incorporeal, and includes
express or implied appurtenant surface rights. Minerals
include oil, gas, in-place minerals such as ores, metals,
and coal, and geothermal resources. (CIV Section 883.110;
In re Waltz, 197 Cal. 263 (1925); Geothermal Kinetics, Inc.
v. Union Oil Co. of California, 75 Cal.App.3d 56 (1977).)
Existing law defines "acknowledged personal delivery" as
written notice that is personally delivered to the owner,
the owner's representative, or lessee, and the owner, the
owner's representative or lessee acknowledges, in writing,
receipt of the notice. (CIV Section 848)
This bill repeals the existing requirement to provide
written notice upon first entry upon the real property to
prospect for, mine, or extract any mineral, and instead
require the owner of mineral rights to provide written
notice under the following circumstances:
1. If the mineral rights owner or its agent intends to
enter real property for the purpose of undertaking
non-surface-disrupting activities such as surveying,
water and mineral testing, and removal of debris and
equipment not involving use of an articulated vehicle on
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the real property, the owner or agent shall provide a
minimum of five days' notice. Reasonable attempts shall
be made to deliver the notice by acknowledged personal
delivery, but if that cannot occur, the notice shall be
delivered by registered letter and be received a minimum
of five days prior to the entrance on the property. The
notice shall specify the date of entry, estimated length
of time the property will be occupied, and the general
nature of the work; and
2. If the mineral rights owner or its agent intends to
enter real property for the purpose of excavation or
other surface-disrupting activities such as drilling new
wells, constructing structures, bringing articulated
vehicles or excavation equipment on the real property,
or reclamation of the real property after the surface
has been disturbed, the owner or agent shall provide a
minimum of 30-days' notice. The notice shall specify
the extent and location of the prospecting, mining, or
extraction operation, and the approximate time or times
of entry and exit upon the real property.
This bill provides that, if a mineral rights owner has been
authorized by the Division of Oil, Gas, and Geothermal
Resources to drill a relief well or to take other immediate
actions in response to an emergency, the notice provisions
in this bill shall be waived. Under this bill, an
"emergency" means a situation, or if the division or its
agent is drilling a relief well or taking other immediate
actions in response to an emergency situation.
The notice specified above shall not be required if the
owner of the real property or assessee has a current,
already negotiated surface use, access use, or similar
agreement with the mineral rights owner, lessee, agent, or
operator.
Background
Throughout California, oil, gas, geothermal resources, and
other minerals are extracted from the ground. In many
cases, ownership of mineral rights in these natural
resources and ownership of the real property from which the
minerals are extracted have been either partially or wholly
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severed. The owner of the mineral rights (subsurface
owner) generally seeks to extract the valuable resources
from the earth, and the real property owner (surface owner)
generally desires to utilize land and the resources
necessary for his or her enjoyment of the land. In
instances where the surface ownership and subsurface
ownership is different, existing law provides that the
subsurface owner may enter the surface owner's property at
any point after providing an initial notice upon entry at
the first instance to prospect for or extract any mineral.
SB 550 (Florez, 2010) would have required an oil or gas
mineral rights owner to provide to the surface owner a
ten-day written notice of intent to enter the surface
owner's property for the purpose of the extraction of
underlying oil or gas. SB 550 was vetoed by Governor
Schwarzenegger due to concerns that the Department of
Conservation would have to resolve mineral rights or
surface rights disputes, which it would not otherwise be
required to do. Unlike SB 550, this bill does not provide
its notice requirements under the Public Resources Code,
which implicated the Governor's concerns regarding
Department of Conservation enforcement, but instead amends
the CIV.
This bill, sponsored by Pacific Ag Management, requires
subsurface owners to provide specified notices to surface
owners prior to entering the surface owner's property for
the purpose of undertaking surface-disrupting or
non-surface-disrupting activities.
Prior legislation . SB 550 (Florez, 2010) passed the Senate
Floor (37-0) on 8/30/12. The bill was vetoed by the
Governor. His veto message states, "This bill would
provide a notice requirement similar to that contained in
SB 550 (Florez, 2010). In vetoing SB 550, Governor
Schwarzenegger stated:
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
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creates a regulatory program in search of a problem. These
disputes should be resolved in the courts, not through the
Department's enforcement processes."
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/27/12)
Pacific Ag Management (source)
California Cotton Ginners and Growers Associations
California Farm Bureau Federation
Western Agricultural Processors Association
ARGUMENTS IN SUPPORT : According to the author:
Farmers who are the surface owners have experienced
losses as a result of lack of notification from
sub-surface owners. With notice from the oil company
and a plan of operations, this may open a dialogue such
that the surface owner could negotiate more
accommodation on their property to limit and/or reduce
the damage to the entire operation- like relocating a
well in order to not disrupt the irrigation system and
render the remainder of the property un-useable.
In addition notification would ensure the surface
owner/farmer is aware when there is to be ingress and
egress so the safety of workers, both mineral and farmer
can be accommodated.
ASSEMBLY FLOOR : 63-0, 5/31/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Campos, Carter, Cedillo,
Chesbro, Davis, Dickinson, Eng, Feuer, Fletcher, Fong,
Fuentes, Furutani, Galgiani, Garrick, Gatto, Gorell,
Grove, Hagman, Halderman, Hall, Hayashi, Roger Hern�ndez,
Hill, Huber, Hueso, Huffman, Knight, Lara, Logue, Bonnie
Lowenthal, Ma, Mitchell, Monning, Morrell, Nestande,
Nielsen, Pan, V. Manuel P�rez, Portantino, Silva,
Skinner, Smyth, Solorio, Swanson, Torres, Wieckowski,
Williams, Yamada, John A. P�rez
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NO VOTE RECORDED: Charles Calderon, Conway, Cook,
Donnelly, Beth Gaines, Gordon, Harkey, Jeffries, Jones,
Mansoor, Mendoza, Miller, Norby, Olsen, Perea, Valadao,
Wagner
RJG:k 8/27/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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