senate Bill S24

2013-2014 Legislative Session

Relates to the regulation of the drilling of natural gas resources

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Jan 08, 2014 referred to environmental conservation
Jan 09, 2013 referred to environmental conservation

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S24 - Bill Details

Current Committee:
Law Section:
Environmental Conservation Law
Laws Affected:
Add Art 23 Title 29 ยงยง23-2901 - 23-2913, En Con L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S1234
2009-2010: S6244

S24 - Bill Texts

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Relates to the regulation of the drilling of natural gas resources.

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BILL NUMBER:S24

TITLE OF BILL:
An act
to amend the environmental conservation law, in relation to the
regulation of the drilling of natural gas resources

PURPOSE OR GENERAL IDEA OF BILL:
To ensure that the exploitation of shale natural gas resources is
conducted in a manner that is consistent with and supportive of New
York State's commitment to sustainability, and is consistent with
other state economic development, energy and environmental policies.

SPECIFIC PROVISIONS:
Section 1 of the bill sets out the legislative intent.

Section 2 adds a new Title 29 to Article 23 of the environmental
conservation law entitled "Regulation of Natural Gas Drilling," It
prohibits the drilling for natural gas within the NYC watershed or
anywhere within 5 miles of its boundaries. It further prohibits
drilling within the Delaware River watershed or anywhere that is a
recharge area of a sole source aquifere. Where gas drilling is
allowed it is to be done in such a way as to protect drinking water.
If there shall be contamination of water wells, there is a
presumption that the natural gas driller is responsible unless they
can show by clear and convincing evidence that they are not the
contaminator. Any spills or prohibited discharges by the driller
which might take place must be reported to DEC, which must have a
procedure in place for taking such reports and ordering remedial
action" Any driller that knowingly covers up a prohibited discharge
shall be guilty of a class A misdemeanor", A driller that knowingly
discharges hydraulic fracturing compounds into surface waters shall
be guilty of a class E felony.

All components of hydraulic fracturing fluids must be disclosed to the
DEC in the application for a permit to drill a well and must file
amendments to its permit and receive permission to make changes in
those components.. The bill sets procedures for taking care of
emergency and non-emergency health situations related to the use of
the hydraulic fracturing compounds, The DEC has the power to prohibit
the use of certain chemicals "" Storage of these fluids and the waste
from drilling must be treated as hazardous waste.

Protection of the environment by the drillers extends to mitigation of
all damage that may be caused to air, wetlands, stream corridors and
endangered species habitat. DEC has the authority to impose fees to
compensate local governments for costs or impacts imposed by the
drillers or their activities.

No well permit may be granted for more than 10 years. Any permitted
action which is not commended with five years shall be deemed null
and void.

Natural gas drillers are responsible for costs of any environmental
damage which occurs in the process of drilling for natural gas. DEC
may require financial security to ensure landowners are protected


from any contingent liability. Should the site be designated as a
brownfield site, the driller shall be considered to be the party in
the chain of responsibility. Any water withdrawals greater than 5000
gal/day or more than one percent of stream flow shall require a
permit. No permit shall be issued if applicant has failed to meet
environmental or financial obligations under a previous permit or has
financial liabilities to the state, a local government, or a private
landowner.

The bill sets out certain requirements for DEC to include in the
permitting process.

The comptroller shall annually audit all royalty payments and shall
have the authority to require appropriate fiscal reporting and record
keeping by producers and government.

DEC must establish an impartial technical advisory committee,
supported by permit fees, to review and issues guidelines on best
practices. This committee shall include representatives from the
environmental community, the public health community, the gas
drilling industry and others that the department deems appropriate.

JUSTIFICATION:
The natural gas industry has reason to believe that there are enormous
natural gas reserves deep underground in the Marcellus Shale Formation.
They are working diligently to sign leases with landowners across the
southern tier of New York State to allow drilling for this valuable
resource to take place" This makes it imperative that the water, as
well as the land and air resources in this region be protected from
contamination by overzealous operators.

This bill is designed to protect the areas that are immediately
adjacent to drinking water supplies by making them off limits to
drilling.
Furthermore, the bill puts in place many protections for the natural
resources of our state and places the burden of any mistakes made by
the drilling industry clearly on their shoulders to clean up and pay
the consequences. The bill directs the DEC to include numerous
protections in the permitting process and requires the permit fees to
cover the costs of oversight by the department along with any
remediation that may become necessary due to the companies' actions.

PRIOR LEGISLATIVE HISTORY:
2009: S.6244 (Duane), Died in Rules; A.8748 (Brennan), Died in
Environmental Conservation
2010: S.6244 (Duane), Died in Environmental Conservation;
A.8748 (Brennan), Died in Environmental Conservation

FISCAL IMPLICATIONS TO STATE AND LOCAL GOVERNMENT:

EFFECTIVE DATE:
120 days after enactment. Any rules or regulations necessary to be
adopted or repealed shall take place immediately.


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

                                   24

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced by Sen. ESPAILLAT -- read twice and ordered printed, and when
  printed to be committed to the Committee on Environmental Conservation

AN  ACT  to amend the environmental conservation law, in relation to the
  regulation of the drilling of natural gas resources

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

  Section 1. Legislative intent. 1. The legislature finds that the proc-
ess  used  to  stimulate natural gas extraction referred to as hydraulic
fracturing utilizes components that are often toxic, that are non-biode-
gradable, and that are virtually impossible to remove  once  they  enter
the  natural environment.  Thus, they pose such a high level of environ-
mental risk that the policy of the state must  be  to  insure  they  are
excluded  from  any  area  that is significant for public drinking water
resources or any other area that is environmentally sensitive.
  2. Natural gas drilling is potentially highly transformative of  rural
landscapes, offering economic benefits to many landowners, but threaten-
ing  the  property  values  of other local landowners, traditional rural
economic activity, the carrying capacity of  local  infrastructure,  the
natural  habitat  of wildlife, and the public health and quality of life
of residents in areas where  there  is  natural  gas  extraction  taking
place.  Unless these resources are protected in the permitting and regu-
latory processes of the state, the costs of Marcellus shale natural  gas
extraction  will  exceed  the  benefits  and natural gas extraction will
become a fundamentally unfair and divisive process in which the  profits
of some are subsidized by the costs to others.
  3.  The proposed scope of natural gas drilling across the state of New
York will present  unprecedented  challenges  of  regulatory  oversight.
Funding for such oversight must be sufficient to meet this challenge and
should  come  from  a  series  of fees paid by the natural gas industry.
Similarly, the natural gas industry should pay for all other costs asso-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01828-01-3

S. 24                               2

ciated with natural gas extraction. Otherwise,  natural  gas  extraction
will  be  unfairly subsidized, either  by the New York state taxpayer or
by the impacts on local human and natural resources.
  4.  One  of  the  chief environmental and infrastructure assets of the
state of New York is its drinking water systems, which play a  fundamen-
tal  role  in  the economic productivity and public health of the state.
The legislature finds that no risk to these resources and to the  public
health  of  their  users  is acceptable and that the policy of the state
with respect to the management of shale gas extraction must be one of no
drinking water risk.
  5. The purpose of this legislation is to insure that the  exploitation
of shale natural gas resources is conducted in a manner that is consist-
ent  with and supportive of New York state's commitment to sustainabili-
ty, and is consistent with other state economic development, energy  and
environmental policies.
  6.  Therefore,  in light of the many commitments the state of New York
has made to more sustainable development and the critical role  greening
the state's economy will play in the future prosperity of the state, the
only  acceptable  natural  gas  extraction practices will be sustainable
ones. This act is intended to ensure that that goal is met.
  S 2. Article 23 of the environmental conservation law  is  amended  by
adding a new title 29 to read as follows:
                                 TITLE 29
                   REGULATION OF NATURAL GAS DRILLING
SECTION 23-2901. NATURAL GAS DRILLING; PROHIBITION  NEAR WATERSHED.
        23-2903. DISCLOSURE OF HYDRAULIC FRACTURING MATERIALS.
        23-2905. PROTECTION OF OTHER ENVIRONMENTAL RESOURCES.
        23-2907. PROTECTION OF LOCAL RESOURCES.
        23-2909. WATER WITHDRAWALS.
        23-2911. ENFORCEMENT AND FINANCIAL SECURITY.
        23-2913. OTHER PROVISIONS.
S 23-2901. NATURAL GAS DRILLING; PROHIBITION NEAR WATERSHED.
  1.  NATURAL  GAS  DRILLING  SHALL NOT BE PERMITTED WITHIN THE NEW YORK
CITY WATERSHED OR AT ANY POINT WITHIN FIVE MILES OF ITS BOUNDARY.
  2. NATURAL GAS DRILLING SHALL NOT BE PERMITTED WITHIN THE WATERSHED OF
THE DELAWARE RIVER, IN ANY RECHARGE AREA OF A SOLE  SOURCE  AQUIFER,  IN
ANY  AREA  WHERE  GROUNDWATER  CONTRIBUTES  A  SIGNIFICANT  BASE FLOW TO
SURFACE WATER SOURCES OF DRINKING WATER, AND IN ANY OTHER AREA WHERE THE
DEPARTMENT SHALL FIND PRESENTS A SIGNIFICANT THREAT OF  HYDRAULIC  FRAC-
TURING COMPOUNDS ENTERING INTO A SIGNIFICANT SOURCE OF DRINKING WATER.
  3. NATURAL GAS DRILLING SHALL BE CONDUCTED IN WAYS THAT DO NOT CONTAM-
INATE DRINKING WATER WELLS. IN ANY AREA WHERE NATURAL GAS DRILLING TAKES
PLACE AND CONTAMINATION OF INDIVIDUAL DRINKING WATER WELLS OCCURS, THERE
SHALL  BE A PRESUMPTION THAT THE NATURAL GAS DRILLING IS RESPONSIBLE FOR
SUCH CONTAMINATION UNLESS THE NATURAL GAS DRILLER CAN SHOW, BY CLEAR AND
CONVINCING EVIDENCE, THAT SUCH DRILLER IS NOT THE SOURCE OF THE  CONTAM-
INATION.  UPON  RECEIVING  A REPORT OF AN INCIDENT OF WELL CONTAMINATION
FROM NATURAL GAS DRILLING, THE DEPARTMENT SHALL INVESTIGATE SUCH  REPORT
WITHIN TWENTY-FOUR HOURS AND SHALL HAVE THE AUTHORITY TO ORDER IMMEDIATE
REMEDIAL  ACTION,  INCLUDING  ISSUING  IMMEDIATE CEASE AND DESIST ORDERS
WITH RESPECT TO THE DRILLING ACTIVITY.  IN THE EVENT THAT THE DEPARTMENT
IS UNABLE TO INVESTIGATE SUCH REPORT WITHIN TWENTY-FOUR  HOURS,  IT  MAY
REQUEST  THAT LOCAL OR STATE POLICE AUTHORITIES CONFIRM THE INCIDENT AND
REPORT AND, IF CONFIRMED, SHALL ISSUE A CEASE AND DESIST ORDER  TO  SUCH
DRILLER  UNTIL IT SHALL MAKE SUCH INVESTIGATION AND DETERMINE THE PROPER
COURSE OF INSURING FULL REMEDIATION.

S. 24                               3

  4.  ANY  SPILLS  OR  PROHIBITED  DISCHARGES  OF  HYDRAULIC  FRACTURING
COMPOUNDS  SHALL  BE  IMMEDIATELY REPORTED BY THE NATURAL GAS DRILLER TO
THE DEPARTMENT, WHICH  SHALL  ESTABLISH  PROCEDURES  FOR  RECORDING  AND
REVIEWING  SUCH  REPORTS AND FOR ORDERING REMEDIAL ACTION TO CONTAIN THE
SPILL  AND KEEP THE SPILL OR DISCHARGE INCIDENT FROM BEING REPEATED. THE
DEPARTMENT SHALL HAVE THE AUTHORITY  TO  IMPOSE  FINES  FOR  FAILURE  TO
REPORT  SUCH INCIDENTS, TO ORDER IMMEDIATE CLEANUP OF SUCH SPILLS AT THE
EXPENSE OF SUCH DRILLER AND, SHOULD SUCH DRILLER FAIL  TO  DO  SO  IN  A
TIMELY  FASHION,  TO  ENTER  INTO  THE  DRILLING AREA AND DO THE CLEANUP
ITSELF, AT THE EXPENSE OF SUCH DRILLER. IN ANY INSTANCE WHERE SUCH DRIL-
LER SHALL REFUSE TO CARRY OUT A DEPARTMENT CLEANUP  OR  REMEDIAL  ACTION
ORDER IN A TIMELY AND APPROPRIATE MANNER, THE DEPARTMENT SHALL ORDER ALL
DRILLING  ACTIVITY  TO CEASE AND DESIST UNTIL SUCH TIME AS THE SPILL HAS
BEEN CLEANED UP AND SUCH DRILLER HAS REMEDIATED THE CONDITIONS OR  PRAC-
TICES THAT CAUSED THE SPILL.
  5.  ANY  DRILLER  OF  NATURAL GAS WHO KNOWINGLY ATTEMPTS TO COVER UP A
SPILL OR PROHIBITED DISCHARGE SHALL BE GUILTY OF A CLASS A  MISDEMEANOR.
ANY DRILLER OF NATURAL GAS WHO KNOWINGLY DISCHARGES HYDRAULIC FRACTURING
COMPOUNDS  INTO  THE  SURFACE  WATERS  OF THE STATE SHALL BE GUILTY OF A
CLASS E FELONY.
  6. NOTHING IN THIS TITLE OR ANY OTHER LAW OR REGULATION  SHALL  ALTER,
LIMIT,  IMPAIR  OR  OTHERWISE  AFFECT  THE AUTHORITY OF THE STATE OF NEW
YORK, OR THE AUTHORITY OF THE CITY OF NEW YORK  IN  THE  NEW  YORK  CITY
WATERSHED,  TO  TAKE  WHATEVER  MEASURES  ARE NECESSARY UNDER THE LAW TO
PROTECT THE QUALITY AND SAFETY OF THE SOURCES OF THE DRINKING WATERS  OF
NEW YORK STATE.
S 23-2903. DISCLOSURE OF HYDRAULIC FRACTURING MATERIALS.
  1. ALL COMPONENTS OF HYDRAULIC FRACTURING MATERIALS SHALL BE DISCLOSED
TO  THE  DEPARTMENT AT THE TIME OF APPLICATION FOR A WELL PERMIT FOR THE
DRILLING OF NATURAL GAS PURSUANT TO THIS ARTICLE.
  (A) EMERGENCY HEALTH SITUATION. WHEN A HEALTH PROFESSIONAL  DETERMINES
THAT A MEDICAL EMERGENCY EXISTS RELATED TO A HYDRAULIC FRACTURING OPERA-
TION  AND  THE INGREDIENTS AND SPECIFIC CHEMICAL IDENTITY OF A HYDRAULIC
FRACTURING FLUID IS NECESSARY FOR EMERGENCY  OR FIRST-AID TREATMENT, THE
HYDRAULIC FRACTURING OPERATOR SHALL IMMEDIATELY  DISCLOSE  THE  SPECIFIC
CHEMICAL  IDENTITY  OF  A  TRADE  SECRET CHEMICAL TO THE TREATING HEALTH
PROFESSIONAL, REGARDLESS OF THE EXISTENCE OF A WRITTEN STATEMENT OF NEED
OR A CONFIDENTIALITY AGREEMENT.
  (B) NON-EMERGENCY HEALTH SITUATION.  WHEN  A  HEALTH  PROFESSIONAL  OR
GOVERNMENT  AGENCY DETERMINES THAT THE INGREDIENTS AND SPECIFIC CHEMICAL
IDENTITY OF A HYDRAULIC  FRACTURING  FLUID  ARE  NECESSARY  FOR  MEDICAL
TREATMENT,  AN OPERATOR SHALL DISCLOSE A SPECIFIC CHEMICAL IDENTITY TO A
HEALTH PROFESSIONAL OR GOVERNMENT AGENCY IF A REQUEST HAS BEEN  MADE  IN
WRITING  THAT  DESCRIBES  WITH  REASONABLE  DETAIL ONE OR MORE HEALTH OR
SAFETY NEEDS FOR THE INFORMATION  AND  INCLUDES  A  DESCRIPTION  OF  THE
PROCEDURES  TO  BE USED TO MAINTAIN THE CONFIDENTIALITY OF THE DISCLOSED
INFORMATION. THE HEALTH PROFESSIONAL OR GOVERNMENT AGENCY SHALL AGREE IN
A WRITTEN CONFIDENTIALITY AGREEMENT THAT THE  TRADE  SECRET  INFORMATION
WILL  NOT  BE  USED FOR ANY PURPOSE OTHER THAN THE HEALTH NEEDS ASSERTED
AND SHALL AGREE NOT TO RELEASE THE INFORMATION UNDER  ANY  CIRCUMSTANCES
OTHER THAN TO A HEALTH PROFESSIONAL OR GOVERNMENT AGENCY.
  2.  NO NATURAL GAS DRILLER MAY CHANGE THE COMPONENTS OR COMPOSITION OF
HYDRAULIC FRACTURING MATERIALS FROM THOSE SPECIFIED IN ITS PERMIT APPLI-
CATION WITHOUT FIRST FILING FOR AND RECEIVING  A  MODIFICATION  OF  SUCH
PERMIT.

S. 24                               4

  3.  THE  DEPARTMENT  SHALL ESTABLISH A STANDARD FOR THE COMPOSITION OF
HYDRAULIC FRACTURING COMPOUNDS AND REQUIRE NATURAL GAS DRILLERS  TO  USE
SUCH  STANDARD.  THE DEPARTMENT SHALL HAVE THE POWER TO PROHIBIT THE USE
OF SPECIFIC CHEMICALS IN THE COMPOSITION OF HYDRAULIC FRACTURING MATERI-
ALS.
  4. HYDRAULIC FRACTURING LIQUIDS AND LIQUID WASTE FROM DRILLING MAY NOT
BE STORED IN OPEN LAGOONS, BUT MUST BE KEPT IN CORROSION PROOF TANKS.
  5. NOTWITHSTANDING ANY OTHER PROVISION OF LAW OR ADMINISTRATIVE DETER-
MINATION,  HYDRAULIC  FRACTURING MATERIAL SHALL BE REGARDED AS HAZARDOUS
WASTE AND TREATED AND DISPOSED OF AS SUCH.
  6. THE DEPARTMENT SHALL ISSUE REGULATIONS REQUIRING  THE  TRACKING  OF
ALL CHEMICAL COMPONENTS OF HYDRAULIC FRACTURING MATERIALS AND SHALL HAVE
THE POWER TO ENFORCE SUCH REGULATIONS BY APPROPRIATE FINES AND CEASE AND
DESIST ORDERS.
S 23-2905. PROTECTION OF OTHER ENVIRONMENTAL RESOURCES.
  1.  DRILLERS  OF  NATURAL  GAS SHALL BE RESPONSIBLE FOR MITIGATING ALL
DAMAGE TO ANY  REGULATED  ENVIRONMENTAL  RESOURCES,  INCLUDING  BUT  NOT
LIMITED  TO  AIR, WETLANDS, STREAM CORRIDORS, AND ENDANGERED AND THREAT-
ENED SPECIES HABITAT.
  2. WELL PERMITS FOR THE DRILLING OF NATURAL GAS SHALL NOT  BE  GRANTED
IN  ANY  AREA WHERE SUCH DRILLING SHALL ADVERSELY IMPACT THE RECOVERY OF
THREATENED OR ENDANGERED SPECIES OR WHERE IT SHALL  DESTROY  OR  DEGRADE
OTHER  UNIQUE NATURAL OR SCENIC RESOURCES. WELL PERMITS FOR THE DRILLING
OF NATURAL GAS SHALL NOT BE GRANTED IN ANY AREA THAT  IS  DESIGNATED  AS
FOREVER  WILD  UNDER  THE STATE CONSTITUTION OR LAWS, IN STATE PARKS, IN
AREAS IDENTIFIED FOR STATE ACQUISITION AND/OR PROTECTION UNDER THE STATE
OPEN SPACE PLAN, OR IN STATE FORESTS AND STATE PARKS.
  3. APPLICATIONS FOR A WELL PERMIT FOR  THE  DRILLING  OF  NATURAL  GAS
SHALL  INCLUDE  AN  ASSESSMENT  OF  ITS  IMPACT  ON  LOCAL  BIODIVERSITY
RESOURCES AND A SHOWING THAT SUCH DRILLING SHALL BE WITHIN THE LEASEHOLD
AT THE LOWEST IMPACT POINT  ON  WILDLIFE.  TO  MINIMIZE  IMPACT  THROUGH
EITHER GROUND DISTURBANCE OR TRAFFIC, ALL EFFORTS SHALL BE MADE TO CLUS-
TER  WELLS,  CENTRALIZE  OPERATIONS,  AND  USE  TELEMETRY. IF NECESSARY,
SEASONAL RESTRICTIONS SHALL BE IMPOSED TO PROTECT WILDLIFE  BREEDING  OR
MIGRATION.
  4.  APPLICATIONS  FOR  A  WELL  PERMIT FOR THE DRILLING OF NATURAL GAS
SHALL LIST ALL EXPECTED EMISSIONS OF AIR POLLUTANTS, INCLUDING, BUT  NOT
LIMITED  TO,  ALL GREENHOUSE GASES SUCH AS METHANE. THE DEPARTMENT SHALL
HAVE THE AUTHORITY TO SPECIFY LIMITS ON ALL  SUCH  AIR  EMISSIONS  AS  A
CONDITION  OF  GRANTING  SUCH  PERMIT,  TO REQUIRE APPROPRIATE EMISSIONS
MONITORING AND CONTROLS BY THE OPERATOR, AND TO DENY  ANY  PERMIT  WHOSE
OPERATION  SHALL  BE INCONSISTENT WITH STATE POLICY AND REGULATIONS WITH
RESPECT TO ADDRESSING GLOBAL WARMING.
S 23-2907. PROTECTION OF LOCAL RESOURCES.
  1. THE DEPARTMENT SHALL HAVE THE AUTHORITY TO IMPOSE FEES  TO  COMPEN-
SATE LOCAL GOVERNMENT FOR ANY COSTS OR IMPACTS IMPOSED UPON SUCH GOVERN-
MENTS AS A RESULT OF DRILLING FOR NATURAL GAS.
  2.  THE  DEPARTMENT,  IN  ITS PERMITTING DECISIONS, SHALL TAKE CARE TO
INSURE THAT NATURAL GAS WELLS ARE SITUATED IN WAYS THAT  MAXIMIZE  FIELD
PRODUCTIVITY  WHILE  MINIMIZING  IMPACTS  ON  THE  LANDSCAPE.  FOR  THIS
PURPOSE, THE DEPARTMENT MAY, WITHIN SPECIFIC REGIONAL  AREAS,  ESTABLISH
PROCEDURES  TO REQUIRE PERIODIC BATCH PROCESSING OF PERMIT APPLICATIONS,
INCLUDING MANDATORY DATES FOR APPLICATION  SUBMISSION,  AND  MAY  IMPOSE
WELL CLUSTERING, CENTRALIZED OPERATIONS, AND THE USE OF TELEMETRY.
  3.  ALL SITING OF NATURAL GAS DRILLING ACTIVITY SHALL CONFORM TO LOCAL
ZONING.

S. 24                               5

  4. ANY PERMIT HOLDER SHALL BE REQUIRED, AT THE  END  OF  ITS  DRILLING
OPERATIONS,  TO  FULLY  RESTORE  THE  DRILL SITE TO ITS PREVIOUS NATURAL
CONDITION. TO ENFORCE THE PROVISIONS OF  THIS  SUBDIVISION,  BEFORE  ANY
LAND  CLEARING OPERATIONS RELATED TO DRILLING ARE COMMENCED, SUCH PERMIT
HOLDER  SHALL  FILE  WITH THE DEPARTMENT, A NON-REVOCABLE AND BANKRUPTCY
PROOF BOND SUFFICIENT, UNDER REGULATIONS TO BE ISSUED BY THE DEPARTMENT,
TO COVER ALL FORESEEABLE COSTS OF SITE RESTORATION.
  5. GAS DRILLING OPERATIONS SHALL BE CONDUCTED IN A MANNER  THAT  SHALL
NOT  BURDEN  ADJACENT LANDOWNERS AND RESIDENTS. NO NOISE AUDIBLE INDOORS
IN RESIDENCES LOCATED ON ADJACENT PROPERTY SHALL  BE  PERMITTED  BETWEEN
THE HOURS OF 8:00 PM AND 8:00 AM ON WEEKDAYS AND 6:00 PM AND 10:00 AM ON
WEEKENDS. SIMILARLY, NIGHT LIGHTING SHALL NOT BE OBTRUSIVE OR DISRUPTIVE
OF LIFE FOR SUCH ADJACENT LANDOWNERS AND RESIDENTS. THE DEPARTMENT SHALL
ENFORCE  THE  PROVISIONS  OF THIS SUBDIVISION BY APPROPRIATE REGULATIONS
INCLUDING A SYSTEM OF FINES, AND SHALL FURTHER HAVE THE POWER  TO  ISSUE
CEASE  AND  DESIST  ORDERS  TO ENFORCE THESE PROTECTIONS AND PROTECT THE
QUIET ENJOYMENT OF LOCAL RESIDENTS.
  6. LANDOWNERS FORCED INTO A  PRODUCTION  POOL  SHALL  BE  ENTITLED  TO
RECEIVE THE HIGHEST PAYMENT THAT ANY OTHER POOL MEMBER RECEIVES.
  7.  ANY  LANDOWNER  WHO  ENTERS INTO A CONTRACT OR LEASE TO PERMIT THE
DRILLING FOR NATURAL GAS ON SUCH LANDOWNER'S PROPERTY SHALL HAVE A THIR-
TY DAY RIGHT OF RECISSION WITH RESPECT TO  SUCH  CONTRACT.  DURING  SUCH
THIRTY  DAY  PERIOD, SUCH LANDOWNER MAY CANCEL SUCH CONTRACT OR LEASE AT
ANY TIME WITHOUT PENALTY.
  8. NO WELL PERMIT FOR THE DRILLING OF NATURAL GAS SHALL BE GRANTED FOR
A PERIOD LONGER THAN TEN YEARS. ANY PERMIT UNDER  WHICH  ACTUAL  NATURAL
GAS  EXTRACTION  IS NOT UNDERTAKEN WITHIN FIVE YEARS SHALL EXPIRE AND BE
DEEMED NULL AND VOID.
  9. THE DEPARTMENT, IN CONSULTATION WITH THE  ATTORNEY  GENERAL,  SHALL
ISSUE  GUIDANCE  DOCUMENTS  TO  LANDOWNERS, WITH RESPECT TO THEIR RIGHTS
WITH RESPECT TO NATURAL GAS DRILLING CONTRACTS AND LEASES.  THE  DEPART-
MENT  IS  HEREBY  AUTHORIZED  TO  REQUIRE  STANDARD  PROVISIONS  IN SUCH
CONTRACTS OR LEASES IN ORDER TO PREVENT UNFAIR TREATMENT OF LANDOWNERS.
  10. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, NATURAL  GAS  DRILLERS
SHALL  BE  RESPONSIBLE  FOR  THE COSTS OF ALL ENVIRONMENTAL DAMAGE WHICH
OCCURRED IN THE PROCESS OF DRILLING FOR AND EXTRACTING NATURAL GAS.  THE
DEPARTMENT  MAY  REQUIRE THE PROVISION OF APPROPRIATE FINANCIAL SECURITY
TO ENSURE LANDOWNERS ARE PROTECTED FROM ANY CONTINGENT LIABILITY. SHOULD
DRILLING ACTIVITY LEAD TO DESIGNATION AS A BROWNFIELD SITE,  AS  DEFINED
IN SUBDIVISION TWO OF SECTION 27-1405 OF THIS CHAPTER, SUCH DRILLER, NOT
THE LANDOWNER, SHALL BE CONSIDERED TO BE PARTY IN THE CHAIN OF RESPONSI-
BILITY.
S 23-2909. WATER WITHDRAWALS.
  ALL  SURFACE  OR  GROUNDWATER  WITHDRAWALS  OF MORE THAN FIVE THOUSAND
GALLONS A DAY FOR NATURAL  GAS  DRILLING  PURPOSES,  OR  MORE  THAN  ONE
PERCENT  OF  IN STREAM FLOW, SHALL REQUIRE A PERMIT FROM THE DEPARTMENT.
THE DEPARTMENT  SHALL  ISSUE  REGULATIONS  GOVERNING  SUCH  WITHDRAWALS,
INCLUDING  PROVISIONS  TO  ASSURE  THAT WATER WITHDRAWALS ARE LIMITED TO
LEVELS THAT DO NOT HARM STREAM ECOLOGY OR FISHERY RESOURCES.
S 23-2911. ENFORCEMENT AND FINANCIAL SECURITY.
  1. NO PERMIT FOR THE DRILLING OF NATURAL GAS SHALL BE GRANTED IF  SUCH
APPLICANT HAS FAILED TO MEET HIS ENVIRONMENTAL AND FINANCIAL OBLIGATIONS
UNDER  A  PREVIOUS  PERMIT  OR  IF  SUCH  APPLICANT HAS UNPAID FINANCIAL
LIABILITIES TO EITHER THE STATE, A LOCAL GOVERNMENT OR A  PRIVATE  LAND-
OWNER.

S. 24                               6

  2.  IN DETERMINING WHETHER OR NOT A PERMIT FOR THE DRILLING OF NATURAL
GAS SHALL BE GRANTED, THE DEPARTMENT SHALL  CONSIDER  THE  PRIOR  RECORD
UNDER  PREVIOUS  PERMITS  OF  THE APPLICANT. APPLICANTS WHO HAVE SHOWN A
PATTERN OF VIOLATION OF PERMIT CONDITIONS OR A LACK OF A PROPER STANDARD
OF CARE IN DRILLING OPERATIONS SHALL NOT BE GRANTED A PERMIT.
  3.  A  PERMIT FOR THE DRILLING OF NATURAL GAS SHALL INCLUDE APPLICABLE
LEASE DOCUMENTS BETWEEN THE DRILLING COMPANY AND THE LANDOWNER OR  LAND-
OWNERS FOR THE DRILLING SITE FOR WHICH THE APPLICATION IS MADE.
  4.  A  PERMIT  APPLICATION  SHALL INCLUDE A COMPREHENSIVE HYDROLOGICAL
ASSESSMENT OF THE SUBSURFACE STRATA  INCLUDING  THE  POTENTIAL  FOR  ANY
FISSURING  THAT  WOULD  DRAW  HYDRAULIC FRACTURING FLUID, NATURAL GAS OR
OTHER POLLUTANTS INTO WATER BEARING AQUIFER STRATA.
  5. THE DEPARTMENT SHALL PROVIDE FOR  UNANNOUNCED  INSPECTIONS  OF  ALL
NATURAL  GAS  DRILLING  SITES  AND  FOR THE PROVISION OF SOIL TESTING TO
DETERMINE THE PRESENCE OF UNREPORTED SPILLS.
  6. THE DEPARTMENT  SHALL  REQUIRE  THAT  ALL  CASING  CONSTRUCTION  BE
CARRIED  OUT  IN  THE PRESENCE OF INDEPENDENT QUALITY CONTROL ENGINEERS.
THE DEPARTMENT SHALL HAVE THE AUTHORITY TO SPECIFY STANDARDS FOR  CASING
CONSTRUCTION,  INCLUDING  COMPOSITION  OF  CONCRETE  AND OTHER TECHNICAL
PARAMETERS FOR DEEP WELL CONSTRUCTION TO INSURE MAXIMUM CASING INTEGRITY
AND PREVENT LEAKAGE OF HYDRAULIC FRACTURING COMPOUNDS, NATURAL  GAS  AND
OTHER  SUBSURFACE  MATERIALS  INTO  WATER BEARING STRATA. THE DEPARTMENT
SHALL, OVER THE LIFE OF THE WELL,  CARRY  OUT  PERIODIC  INSPECTIONS  TO
ENSURE THAT CASING INTEGRITY IS MAINTAINED.
S 23-2913. OTHER PROVISIONS.
  1.  THE STATE COMPTROLLER SHALL ANNUALLY AUDIT ALL ROYALTY PAYMENTS TO
THE STATE AND LOCAL GOVERNMENTS, INCLUDING THE GAS PRODUCTION AND  SALES
FIGURES ON WHICH THEY ARE BASED, AND SHALL HAVE THE AUTHORITY TO REQUIRE
APPROPRIATE  FISCAL  REPORTING  AND  RECORD  KEEPING BY BOTH NATURAL GAS
PRODUCERS AND OTHER DEPARTMENTS OF STATE GOVERNMENT CHARGED  WITH  THEIR
SUPERVISION.
  2.  THE  STATE  COMPTROLLER  SHALL  HAVE THE AUTHORITY TO PERIODICALLY
AUDIT PAYMENTS MADE UNDER DRILLING CONTRACTS AND LEASES TO PRIVATE LAND-
OWNERS, INCLUDING THE GAS PRODUCTION AND SALES FIGURES ON WHICH THEY ARE
BASED, TO DETERMINE THAT THEY ARE IN COMPLIANCE WITH THE  PROVISIONS  OF
THE CONTRACT OR LEASE AND ALL APPLICABLE LAWS.
  3.  THE  DEPARTMENT  SHALL  ESTABLISH  AN IMPARTIAL TECHNICAL ADVISORY
COMMITTEE, WHOSE RESEARCH AND WORK SHALL BE SUPPORTED BY PERMIT FEES, TO
REVIEW AND ISSUE GUIDANCE DOCUMENTS  ON  GAS  DRILLING  BEST  PRACTICES.
SUCH  COMMITTEE  SHALL  INCLUDE  AT  LEAST  ONE  REPRESENTATIVE FROM THE
FOLLOWING INTEREST  GROUPS:  THE  ENVIRONMENTAL  COMMUNITY;  THE  PUBLIC
HEALTH COMMUNITY; AND THE GAS DRILLING INDUSTRY, ALONG WITH PERSONS FROM
THE  DEPARTMENT OR OTHERS THE DEPARTMENT DEEMS APPROPRIATE.  THE DEPART-
MENT MAY REQUIRE COMPLIANCE WITH SUCH PRACTICES AS A CONDITION OF PERMIT
APPROVAL.
  S 3. This act shall take effect on the one hundred twentieth day after
it shall have become a law, provided, however, that effective immediate-
ly, the addition, amendment and/or repeal  of  any  rule  or  regulation
necessary  for  the  implementation of this act on its effective date is
authorized to be made and completed on or before such date.

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