S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         3862
                              2015-2016 Regular Sessions
                                   I N  S E N A T E
                                   February 20, 2015
                                      ___________
       Introduced  by  Sen. KRUEGER -- 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
         natural gas exploration and extraction liability act of 2015
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. Short title. This act shall be known and may  be  cited  as
    2  the "natural gas exploration and extraction liability act of 2015".
    3    S  2.  Legislative findings. 1. The legislature finds that the process
    4  used to stimulate natural gas extraction  referred  to  as  high  volume
    5  hydraulic  fracturing,  also known as "hydro fracturing" and "fracking,"
    6  utilizes components that are often toxic,  that  are  non-biodegradable,
    7  and  that are virtually impossible to remove once they enter the natural
    8  environment. Among the chemicals used  are  volatile  organic  compounds
    9  such  as benzene, toluene, ethyl benzene, and xylene. Many of the chemi-
   10  cals used in this process are federally listed hazardous substances, and
   11  there is only minimal data about the rest. Many of these hazardous chem-
   12  icals are known carcinogens and others can cause other life  threatening
   13  illnesses.  As  a  result  of the air and water pollution caused by such
   14  exploration and extraction operations people are  exposed  to  endocrine
   15  disrupting  agents that can cause kidney, liver, heart, blood, and brain
   16  damage.
   17    2. High volume hydraulic fracturing requires the construction of large
   18  well pads (up to five acres) to  support  the  large  number  of  trucks
   19  delivering  the  fracking chemicals, water trucks, pump trucks and other
   20  equipment. Such  massive  scale  industrial  activity  causes  excessive
   21  noise,  disturbs  underground  water  formations,  vibrates  surrounding
   22  structures, and can result in earthquakes. Millions of gallons  of  this
   23  chemically-laced  water  return  to  the  surface laden with salt, heavy
   24  metals and radioactive elements. This wastewater is often stored in open
   25  pits until transported for ultimate disposal. Wildlife and farm  animals
   26  that  have  mistaken  these  pits for freshwater ponds have been killed.
   27  Chemicals may evaporate from these pits, contributing to air  pollution.
   28  Leaks  and  spills  of fracking chemicals from the trucks and waste pits
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD03964-01-5
       S. 3862                             2
    1  cause contamination of surface waters. The  remainder  of  the  fracking
    2  fluid  remains  underground with the possibility of migrating or seeping
    3  through fractures in the underground formations, cracks in the well-bore
    4  casing, and through abandoned wells to pollute groundwater.
    5    3.  Widespread  use  of high volume hydraulic fracturing diminishes or
    6  destroys the natural beauty of the land, depletes or interferes with the
    7  natural sources of water used for domestic  and  agricultural  purposes,
    8  disrupts  the natural habitat of wildlife, imposes unaffordable costs on
    9  municipalities and reduces property values thereby harming both homeown-
   10  ers and the municipalities in which such activities are located.
   11    4. Tourism is a major industry for much of the Marcellus  Shale  area.
   12  The  construction  and  operation of natural gas wells in such area will
   13  have a long term negative effect upon such industry that will result  in
   14  lost profits and diminished business value and lost revenue to the muni-
   15  cipalities where such tourism ventures are located.
   16    5.  The  natural  gas  industry  has  embarked upon the procurement in
   17  unprecedented numbers of mineral leases from private landowners across a
   18  broad section of New York state  that  overlays  the  "Marcellus  Shale"
   19  geological  structure for the purpose of utilizing high volume hydraulic
   20  fracturing to extract and mine natural gas from the  shale.  It  is  not
   21  unusual  for 40% or more of the land in such areas to be currently under
   22  lease (although such land is owned by a small minority of landowners  in
   23  the  region) and, accordingly, the industry is poised to secure billions
   24  of dollars in profits from such extraction while potentially causing  an
   25  even  greater  amount  of  damage  to  non-participating  landowners and
   26  renters, as well as to municipalities and even visitors to the area.
   27    6. The legislature further finds that the use of high volume hydraulic
   28  fracturing techniques constitutes a hazardous practice that will  result
   29  in large scale damages to innocent parties.
   30    7.  The  legislature  further finds that landowners who, subsequent to
   31  the effective date of this act, enter into or extend leases with natural
   32  gas exploration, operation, transportation or extraction entities  share
   33  responsibility  with such entities for all damages shown to be caused by
   34  such activities and that all responsible parties be held strictly liable
   35  for damages resulting from such activities.
   36    S 3. Article 23 of the environmental conservation law  is  amended  by
   37  adding a new title 29 to read as follows:
   38                                   TITLE 29
   39              NATURAL GAS EXPLORATION AND EXTRACTION LIABILITY
   40  SECTION 23-2901. DEFINITIONS.
   41          23-2903. STRICT LIABILITY.
   42          23-2905. JOINT AND SEVERAL LIABILITY.
   43          23-2907. STANDING OF MUNICIPAL CORPORATIONS.
   44          23-2909. ELEMENTS OF DAMAGES; TREBLE DAMAGES.
   45          23-2911. ATTORNEY FEES.
   46  S 23-2901. DEFINITIONS.
   47    AS USED IN THIS TITLE, UNLESS THE CONTEXT OTHERWISE REQUIRES:
   48    1. "HIGH VOLUME HYDRAULIC FRACTURING" SHALL MEAN THE USE OF CHEMICALS,
   49  WATER AND OTHER SUBSTANCES INJECTED OR PUMPED INTO A NATURAL GAS WELL TO
   50  STIMULATE  PRODUCTION  OF  THE  WELL IN VOLUMES IN EXCESS OF ONE HUNDRED
   51  THOUSAND GALLONS IN A CONTINUOUS TWENTY-FOUR HOUR PERIOD OR IN EXCESS OF
   52  TWO HUNDRED FIFTY THOUSAND GALLONS IN ANY CONSECUTIVE THIRTY DAY PERIOD.
   53    2. "PERSON" SHALL MEAN ANY  INDIVIDUAL,  ASSOCIATION,  CORPORATION  OR
   54  OTHER   ENTITY  THAT  ENGAGES  IN  NATURAL  GAS  EXPLORATION,  DRILLING,
   55  EXTRACTION OR TRANSPORTATION. THE TERM "PERSON" SHALL INCLUDE ANY  INDI-
   56  VIDUAL,  ASSOCIATION,  CORPORATION OR OTHER ENTITY THAT OWNS AN INTEREST
       S. 3862                             3
    1  IN LAND THAT IS SUBJECT TO A LEASE OR OTHER GRANT THAT  PERMITS  SURFACE
    2  RIGHTS,  SUB-SURFACE  RIGHTS  OR BOTH SURFACE AND SUB-SURFACE RIGHTS FOR
    3  THE  PURPOSE  OF  NATURAL  GAS  EXPLORATION,  DRILLING,   OPERATION   OR
    4  EXTRACTION  UNLESS  SAID LEASE OR GRANT WAS EXECUTED PRIOR TO THE EFFEC-
    5  TIVE DATE OF THIS TITLE.
    6  S 23-2903. STRICT LIABILITY.
    7    NATURAL GAS EXPLORATION, DRILLING, EXTRACTION BY USE  OF  HIGH  VOLUME
    8  HYDRAULIC  FRACTURING  TECHNIQUES  AND TRANSPORTATION OF HYDROFRACTURING
    9  CHEMICALS AND WASTE PRODUCTS, HAVING BEEN DEEMED HAZARDOUS ACTIVITIES BY
   10  THE LEGISLATURE, ENTAIL STRICT LIABILITY ON THE PART OF ANY  PERSON,  AS
   11  DEFINED  IN  THIS  TITLE,  THAT UNDERTAKES SUCH ACTIVITIES IN THE STATE.
   12  NEITHER COMPLIANCE WITH THE REQUIREMENTS OF THIS TITLE, THE ISSUANCE  OF
   13  A  PERMIT FOR SUCH ACTIVITIES NOR THE EXERCISE OF DUE CARE, SHALL EXCUSE
   14  ANY SUCH PERSON FROM LIABILITY FOR PERSONAL, PROPERTY OR OTHER  ELEMENTS
   15  OF DAMAGE PURSUANT TO THIS TITLE DETERMINED TO BE CAUSED BY SUCH HAZARD-
   16  OUS  ACTIVITIES.  DISTINCTIONS  BETWEEN  DIRECT AND CONSEQUENTIAL DAMAGE
   17  SHALL NOT RELIEVE SUCH  PERSON  OF  ABSOLUTE  LIABILITY,  SUCH  PERSON'S
   18  INTENT  OR  NEGLIGENCE  FOR  ANY  PERSONAL, PROPERTY OR OTHER ELEMENT OF
   19  DAMAGE PURSUANT TO THIS TITLE NOTWITHSTANDING.
   20  S 23-2905. JOINT AND SEVERAL LIABILITY.
   21    THE LIABILITY OF ANY PERSON AS DEFINED IN THIS TITLE  SHALL  BE  JOINT
   22  AND  SEVERAL  WITH  THE  LIABILITY OF ALL OTHER PERSONS FOUND LIABLE FOR
   23  DAMAGES RESULTING FROM THE SAME INCIDENT, EVENT, NATURAL GAS  OPERATION,
   24  EXPLORATION OR EXTRACTION OR TRANSPORTATION ACTIVITY.
   25  S 23-2907. STANDING OF MUNICIPAL CORPORATIONS.
   26    FOR  THE PURPOSES OF THIS TITLE, ALL MUNICIPAL CORPORATIONS, INCLUDING
   27  SCHOOL DISTRICTS, SHALL HAVE STANDING TO PURSUE ALL LEGAL  REMEDIES  FOR
   28  DAMAGES PURSUANT TO THIS TITLE.
   29  S 23-2909. ELEMENTS OF DAMAGES; TREBLE DAMAGES.
   30    1.  IN ALL ACTIONS ARISING FROM THE PROVISIONS OF THIS TITLE, EVIDENCE
   31  TENDING TO PROVE THE FOLLOWING ELEMENTS OF DAMAGES SHALL BE ADMISSIBLE:
   32    A. PERSONAL INJURY AND WRONGFUL DEATH;
   33    B. PROPERTY DAMAGE;
   34    C. REDUCTION IN PROPERTY VALUE;
   35    D. REDUCTION IN BUSINESS VALUE, LOSS OF PROFITS;
   36    E. ALL OTHER DAMAGES CAUSED BY SUCH ACTIVITIES; AND
   37    F. IN THE CASE OF MUNICIPAL CORPORATIONS:
   38    (1) DAMAGE TO AND MAINTENANCE OF INFRASTRUCTURE;
   39    (2) LOSS OF REVENUE DUE TO REAL PROPERTY TAX REDUCTIONS RESULTING FROM
   40  SUCH EXPLORATION, DRILLING, EXTRACTION AND TRANSPORTATION ACTIVITIES;
   41    (3) COSTS INCURRED BY EMERGENCY OPERATIONS NECESSITATED BY SUCH ACTIV-
   42  ITIES; AND
   43    (4) ALL OTHER DAMAGES CAUSED BY SUCH ACTIVITIES.
   44    2. IN ANY ACTION ARISING PURSUANT TO THIS TITLE, IF THE TRIER OF  FACT
   45  DETERMINES THAT ANY DEFENDANT ACTED WILLFULLY, MALICIOUSLY OR WITH GROSS
   46  NEGLIGENCE,  THE  COURT  SHALL  AWARD  THREE TIMES THE AMOUNT OF DAMAGES
   47  ESTABLISHED BY THE TRIER OF FACT.
   48  S 23-2911. ATTORNEY FEES.
   49    IN ANY ACTION ARISING PURSUANT TO THIS TITLE, A PLAINTIFF WHO HAS BEEN
   50  AWARDED DAMAGES SHALL ALSO RECOVER REASONABLE ATTORNEY FEES AND EXPENSES
   51  OF LITIGATION FROM THE DEFENDANTS, JOINTLY AND SEVERALLY.
   52    S 4. This act shall take effect on the ninetieth day  after  it  shall
   53  have become a law.