S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7377

                            I N  S E N A T E

                              April 5, 2010
                               ___________

Introduced  by  Sen. SCHNEIDERMAN -- read twice and ordered printed, and
  when printed to be committed to the Committee on Environmental Conser-
  vation

AN ACT to amend the environmental conservation law, in relation  to  the
  natural gas exploration and extraction liability act of 2010

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Short title. This act shall be known and may  be  cited  as
the natural gas exploration and extraction liability act of 2010.
  S  2.  Legislative findings. 1. The legislature finds that the process
used to stimulate natural gas extraction  referred  to  as  high  volume
hydraulic  fracturing,  also known as "hydro fracturing" and "fracking,"
utilizes components that are often toxic,  that  are  non-biodegradable,
and  that are virtually impossible to remove once they enter the natural
environment. Among the chemicals used  are  volatile  organic  compounds
such  as benzene, toluene, ethyl benzene, and xylene. Many of the chemi-
cals used in this process are federally listed hazardous substances, and
there is only minimal data about the rest. Many of these hazardous chem-
icals are known carcinogens and others can cause other life  threatening
illnesses.  As  a  result  of the air and water pollution caused by such
exploration and extraction operations people are  exposed  to  endocrine
disrupting  agents that can cause kidney, liver, heart, blood, and brain
damage.
  2. High volume hydraulic fracturing requires the construction of large
well pads (up to five acres) to  support  the  large  number  of  trucks
delivering  the  fracking chemicals, water trucks, pump trucks and other
equipment. Such  massive  scale  industrial  activity  causes  excessive
noise,  disturbs  underground  water  formations,  vibrates  surrounding
structures, and can result in earthquakes. Millions of gallons  of  this
chemically-laced  water  returns  to  the surface laden with salt, heavy
metals and radioactive elements. This wastewater is often stored in open
pits until transported for ultimate disposal. Wildlife and farm  animals
that  have  mistaken  these  pits for freshwater ponds have been killed.
Chemicals may evaporate from these pits, contributing to air  pollution.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD15082-02-9

S. 7377                             2

Leaks  and  spills  of fracking chemicals from the trucks and waste pits
cause contamination of surface waters. The  remainder  of  the  fracking
fluid  remains  underground with the possibility of migrating or seeping
through fractures in the underground formations, cracks in the well-bore
casing, and through abandoned wells to pollute groundwater.
  3.  Widespread  use  of high volume hydraulic fracturing diminishes or
destroys the natural beauty of the land, depletes or interferes with the
natural sources of water used for domestic  and  agricultural  purposes,
disrupts  the natural habitat of wildlife, imposes unaffordable costs on
municipalities, reduces property values thereby harming both  homeowners
and the municipalities in which such activities are located.
  4.  Tourism  is a major industry for much of the Marcellus Shale area.
The construction and operation of natural gas wells in  such  area  will
have  a long term negative effect upon such industry that will result in
lost profits and diminished business value and lost revenue to the muni-
cipalities where such tourism ventures are located.
  5. The natural gas industry  has  embarked  upon  the  procurement  in
unprecedented numbers of mineral leases from private landowners across a
broad  section  of  New  York  state that overlays the "Marcellus Shale"
geological structure for the purpose of utilizing high volume  hydraulic
fracturing  to  extract  and  mine natural gas from the shale. It is not
unusual for 40% or more of the land in such areas to be currently  under
lease  (although such land is owned by a small minority of landowners in
the region) and, accordingly, the industry is poised to secure  billions
of  dollars in profits from such extraction while potentially causing an
even greater amount of  damage  to  non-participating  land  owners  and
renters, as well as to municipalities and even visitors to the area.
  6. The legislature further finds that the use of high volume hydraulic
fracturing  techniques constitutes a hazardous practice that will result
in large scale damages to innocent parties.
  7. The legislature further finds that landowners  who,  subsequent  to
the effective date of this act, enter into or extend leases with natural
gas  exploration, operation, transportation or extraction entities share
responsibility with such entities for all damages shown to be caused  by
such activities and that all responsible parties be held strictly liable
for damages resulting from such activities.
  S  3.  Article  23 of the environmental conservation law is amended by
adding a new title 29 to read as follows:
                                 TITLE 29
            NATURAL GAS EXPORTATION AND EXTRACTION LIABILITY
SECTION 23-2901. DEFINITIONS.
        23-2903. STRICT LIABILITY.
        23-2905. JOINT AND SEVERAL LIABILITY.
        23-2907. STANDING OF MUNICIPAL CORPORATIONS.
        23-2909. ELEMENTS OF DAMAGES; TREBLE DAMAGES.
        23-2911. ATTORNEY FEES.
S 23-2901. DEFINITIONS.
               AS USED IN  THIS  TITLE,  UNLESS  THE  CONTEXT  OTHERWISE
             REQUIRES:
  1. "HIGH VOLUME HYDRAULIC FRACTURING" SHALL MEAN THE USE OF CHEMICALS,
WATER AND OTHER SUBSTANCES INJECTED OR PUMPED INTO A NATURAL GAS WELL TO
STIMULATE  PRODUCTION  OF  THE  WELL IN VOLUMES IN EXCESS OF ONE HUNDRED
THOUSAND GALLONS IN A CONTINUOUS TWENTY-FOUR HOUR PERIOD OR IN EXCESS OF
TWO HUNDRED FIFTY THOUSAND GALLONS IN ANY CONSECUTIVE THIRTY DAY PERIOD.
  2. "PERSON" SHALL MEAN ANY  INDIVIDUAL,  ASSOCIATION,  CORPORATION  OR
OTHER   ENTITY  THAT  ENGAGES  IN  NATURAL  GAS  EXPLORATION,  DRILLING,

S. 7377                             3

EXTRACTION OR TRANSPORTATION. THE TERM "PERSON" SHALL INCLUDE ANY  INDI-
VIDUAL,  ASSOCIATION,  CORPORATION OR OTHER ENTITY THAT OWNS AN INTEREST
IN LAND THAT IS SUBJECT TO A LEASE OR OTHER GRANT THAT  PERMITS  SURFACE
RIGHTS,  SUB-SURFACE  RIGHTS  OR BOTH SURFACE AND SUB-SURFACE RIGHTS FOR
THE  PURPOSE  OF  NATURAL  GAS  EXPLORATION,  DRILLING,   OPERATION   OR
EXTRACTION  UNLESS  SAID LEASE OR GRANT WAS EXECUTED PRIOR TO THE EFFEC-
TIVE DATE OF THIS TITLE.
S 23-2903. STRICT LIABILITY.
  NATURAL GAS EXPLORATION, DRILLING, EXTRACTION BY USE  OF  HIGH  VOLUME
HYDRAULIC  FRACTURING  TECHNIQUES  AND TRANSPORTATION OF HYDROFRACTURING
CHEMICALS AND WASTE PRODUCTS, HAVING BEEN DEEMED HAZARDOUS ACTIVITIES BY
THE LEGISLATURE, ENTAILS STRICT LIABILITY ON THE PART OF ANY PERSON,  AS
DEFINED  IN  THIS  TITLE,  THAT UNDERTAKES SUCH ACTIVITIES IN THE STATE.
NEITHER COMPLIANCE WITH THE REQUIREMENTS OF THIS TITLE, THE ISSUANCE  OF
A PERMIT FOR SUCH ACTIVITIES NOR THE EXERCISES OF DUE CARE, SHALL EXCUSE
ANY  SUCH PERSON FROM LIABILITY FOR PERSONAL, PROPERTY OR OTHER ELEMENTS
OF DAMAGE PURSUANT TO THIS TITLE DETERMINED TO BE CAUSED BY SUCH HAZARD-
OUS ACTIVITIES. DISTINCTIONS BETWEEN  DIRECT  AND  CONSEQUENTIAL  DAMAGE
SHALL  NOT  RELIEVE  SUCH  PERSON  OF  ABSOLUTE LIABILITY, SUCH PERSON'S
INTENT OR NEGLIGENCE FOR ANY PERSONAL,  PROPERTY  OR  OTHER  ELEMENT  OF
DAMAGE PURSUANT TO THIS TITLE NOTWITHSTANDING.
S 23-2905. JOINT AND SEVERAL LIABILITY.
  THE  LIABILITY  OF  ANY PERSON AS DEFINED IN THIS TITLE SHALL BE JOINT
AND SEVERAL WITH THE LIABILITY OF ALL OTHER  PERSONS  FOUND  LIABLE  FOR
DAMAGES  RESULTING FROM THE SAME INCIDENT, EVENT, NATURAL GAS OPERATION,
EXPLORATION OR EXTRACTION OR TRANSPORTATION ACTIVITY.
S 23-2907. STANDING OF MUNICIPAL CORPORATIONS.
  FOR THE PURPOSES OF THIS TITLE, ALL MUNICIPAL CORPORATIONS,  INCLUDING
SCHOOL  DISTRICTS,  SHALL HAVE STANDING TO PURSUE ALL LEGAL REMEDIES FOR
DAMAGES PURSUANT TO THIS TITLE.
S 23-2909. ELEMENTS OF DAMAGES; TREBLE DAMAGES.
  1. IN ALL ACTIONS ARISING FROM THE PROVISIONS OF THIS TITLE,  EVIDENCE
TENDING TO PROVE THE FOLLOWING ELEMENTS OF DAMAGES SHALL BE ADMISSIBLE:
  A. PERSONAL INJURY AND WRONGFUL DEATH;
  B. PROPERTY DAMAGE;
  C. REDUCTION IN PROPERTY VALUE;
  D. REDUCTION IN BUSINESS VALUE, LOSS OF PROFITS;
  E. ALL OTHER DAMAGES CAUSED BY SUCH ACTIVITIES; AND
  F. IN THE CASE OF MUNICIPAL CORPORATIONS:
  (1) DAMAGE TO AND MAINTENANCE OF INFRASTRUCTURE;
  (2) LOSS OF REVENUE DUE TO REAL PROPERTY TAX REDUCTIONS RESULTING FROM
SUCH EXPLORATION, DRILLING, EXTRACTION AND TRANSPORTATION ACTIVITIES;
  (3) COSTS INCURRED BY EMERGENCY OPERATIONS NECESSITATED BY SUCH ACTIV-
ITIES; AND
  (4) ALL OTHER DAMAGES CAUSED BY SUCH ACTIVITIES.
  2.  IN ANY ACTION ARISING PURSUANT TO THIS TITLE, IF THE TRIER OF FACT
DETERMINES THAT ANY DEFENDANT ACTED WILLFULLY, MALICIOUSLY OR WITH GROSS
NEGLIGENCE, THE COURT SHALL AWARD THREE  TIMES  THE  AMOUNT  OF  DAMAGES
ESTABLISHED BY THE TRIER OF FACT.
S 23-2911. ATTORNEY FEES.
  IN ANY ACTION ARISING PURSUANT TO THIS TITLE, A PLAINTIFF WHO HAS BEEN
AWARDED DAMAGES SHALL ALSO RECOVER REASONABLE ATTORNEY FEES AND EXPENSES
OF LITIGATION FROM THE DEFENDANTS, JOINTLY AND SEVERALLY.
  S  4.  This  act shall take effect on the ninetieth day after it shall
have become a law.