AB 585

Bill Subjects

Abstract

Existing law vests with the State Lands Commission control over certain public lands. Existing law authorizes, with respect to oil, gas, and mineral leases, the assignment, transfer, or sublet as to all or any part of certain leased or permitted lands, as prescribed, subject to approval by the commission, to any person, association of persons, or corporation, who, at the time of the proposed assignment, transfer, or sublease, possesses certain qualifications. Existing law provides that the commission's approval of any assignment or transfer of a separate portion of any lease or permit, or of a separate or distinct zone or geological horizon, or portion of a separate or distinct zone or geological horizon, releases and discharges the assignor or transferor from all obligations thereafter accruing under the lease or permit with respect to the assigned, transferred, or subleased portion of the lease or permit. This bill would require an assignment, transfer, or sublease, or a memorandum of an assignment, transfer, or sublease, to be recorded in the office of the county recorder of the county in which the leased or permitted lands are located. The bill would authorize the commission, in considering an approval of an assignment, transfer, or sublease of a lease or permit under those provisions, to consider whether the proposed assignee, as defined, is likely to comply with the terms of the assigned lease or permit for the duration of both the primary term of the original lease or permit and any extended term of the lease because of production, as determined by specified factors. The bill would delete the above-described provisions releasing and discharging an assignor or transferor from obligations accruing under a lease or permit after the assignment, transfer, or sublease, and would instead provide that an assignor, transferor, or sublessor of a lease or permit remains liable for, and shall not be released or discharged from, obligations under the lease or permit, including requirements under state law to properly plug and abandon all wells, decommission all production facilities and related infrastructure, complete well site restoration and lease restoration, and remediate contamination at well and lease sites, except as provided. The bill, on and after January 1, 2020, would make a lessee, an assignee, a transferee, or a sublessee of a lease, or an operator of leased lands under these provisions, responsible and liable, from the date on which it engages in specified activities, for plugging and abandoning all wells and decommissioning all production facilities and related infrastructure, as defined, that have been or may be left on the leased lands by the lessee and any past, present, or future assignee, transferee, or sublessee of the lease or operator of the leased lands. The bill would require a lessee, assignee, transferee, sublessee, or operator to submit to the commission, in writing, a notarized affidavit of liability for the decommissioning of production facilities and related infrastructure under the jurisdiction of the commission within 6 months after the date on which a lease terminates or expires, and would require the lessee, assignee, transferee, sublessee, or operator to also covenant, in the notarized affidavit, to commence the process of decommissioning the production facilities and related infrastructure within one year after the date on which the lease terminates or expires. The bill would make the failure of a lessee, assignee, transferee, sublessee, or operator to comply with these deadlines a misdemeanor, punishable by a fine of up to $10,000, by imprisonment in the county jail for up to one year, or by both that fine and imprisonment, for each offense. By creating a new crime, the bill would impose a state-mandated local program. The bill would require the decommissioning of the production facilities and related infrastructure to be completed without undue delay, unless the delay is caused by conditions beyond the control of the lessee, assignee, transferee, sublessee, or operator. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.