Oil and gas wells and facilities: liens: collections unit.

Existing law establishes the Geologic Energy Management Division in the Department of Conservation, under the direction of the State Oil and Gas Supervisor, who is required to supervise the drilling, operation, maintenance, and abandonment of wells and the operation, maintenance, and removal or abandonment of tanks and facilities related to oil and gas production within an oil and gas field, so as to prevent damage to life, health, property, and natural resources. Existing law requires the supervisor to order those tests or remedial work that in the judgment of the supervisor are necessary to prevent damage to life, health, property, and natural resources, to protect oil and gas deposits from damage by underground water, to prevent the escape of water into underground formations, or to prevent the infiltration of detrimental substances into underground or surface water suitable for irrigation or domestic purposes, to the best interests of the neighboring property owners and the public. Existing law authorizes the supervisor or district deputy to order the plugging and abandonment of a well or the decommissioning of a production facility that has been deserted whether or not any damage is occurring or threatened by reason of that deserted well or production facility. Existing law requires the owner or operator to commence, in good faith, the work ordered and continue it until completion and, if the work has not been commenced and continued to completion, authorizes the supervisor to appoint necessary agents to enter the premises and perform the work and provides that any amounts expended are a perfected and enforceable state tax lien against real or personal property of the operator. This bill would authorize the division, before performing the work ordered by the supervisor or district deputy, to impose a lien against the real or personal property of the operator in an amount equal to an estimate of the cost of the work based on a bid from a contractor or previous costs to perform comparable work. The bill would require the division's accounting of actual or estimated costs to perform work ordered to be served upon the operator by personal service or certified mail. The bill would require the supervisor, on or before July 1, 2022, to establish a collections unit within the division to be responsible for identifying persons responsible for specified charges, locating assets belonging to those persons, and fully implementing all of the division's authorities for collecting the amounts owed. Until January 1, 2027, to the extent feasible, the bill would require the division to use existing resources and personnel in establishing the collections unit. Existing law requires the operator of any idle well to either (1) no later than May 1 of each year, for each idle well that was an idle well at any time in the last calendar year, file with the supervisor an annual fee, or (2) file a plan with the supervisor to provide for the management and elimination of all long-term idle wells. This bill would require the division, by April 1 of each year, to send a notice to the operator of an idle well identifying the amount of the annual fee due no later than May 1 of that year and stating that if the fee amount in the notice is in error, the operator may apply to the division before May 1 of that year to have the fee amount corrected. Existing law requires the supervisor, on or before July 1, 2019, and annually thereafter until July 1, 2026, to prepare and transmit to the Legislature a comprehensive report on the status of idle and long-term idle wells for the preceding calendar year that includes specified information. For the report due on or before July 1, 2021, and for each report thereafter, existing law requires the division to conduct inspections of production facilities attendant to long-term idle wells and requires that information summarizing violations and pertinent findings in these inspections be included in each report. For the report due on or before July 1, 2023, and each report thereafter, this bill would require the division to provide a description of activities undertaken by the division's collections unit, as specified. This bill would incorporate additional changes to Section 3206.3 of the Public Resources Code proposed by SB 84 to be operative only if this bill and SB 84 are enacted and this bill is enacted last.