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

                                  2108

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                            January 13, 2011
                               ___________

Introduced  by  M. of A. LIFTON, GLICK, O'DONNELL, GOTTFRIED, M. MILLER,
  MILLMAN, SCHIMEL, CASTRO, COLTON -- Multi-Sponsored by  --  M.  of  A.
  COOK,  MARKEY,  PHEFFER,  WEISENBERG  -- read once and referred to the
  Committee on Environmental Conservation

AN ACT to amend the environmental conservation law, in relation  to  the
  natural gas exploration and extraction liability act of 2011

  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 2011.
  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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03870-01-1
              

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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.
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 and reduces property values thereby harming both homeown-
ers 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

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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,
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,  ENTAIL 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.

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  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.