A029-1213 10 AN ACT CONCERNING

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Maryland Hydraulic Fracturing Moratorium and Right to Know Act of 2013 FOR the purpose of prohibiting the Department of the Environment from issuing a certain permit for the hydraulic fracturing of a well for the exploration or production of natural gas until certain conditions are met; requiring the Department of the Environment and the Department of Natural Resources to issue a certain risk assessment at a certain time; authorizing the Department of the Environment to establish and collect a certain fee under certain circumstances; requiring the Department of the Environment to adopt certain regulations; requiring the Department of the Environment and the Department of Natural Resources to jointly brief certain committees of the General Assembly on a certain report and certain risk assessment within a certain period of time; declaring the intent of the General Assembly; making stylistic changes; defining certain terms; altering certain definitions; and generally relating to the hydraulic fracturing of a well for the exploration or production of natural gas in the State. BY repealing and reenacting, with amendments, Article Environment Section 14102 Annotated Code of Maryland (2007 Replacement Volume and 2012 Supplement) BY adding to Article Environment Section 14107.1 Annotated Code of Maryland (2007 Replacement Volume and 2012 Supplement) SECTION 1. BE IT ENACTED BY THE MARYLAND STUDENT LEGISLATURE, that the Laws of Maryland read as follows: Article Environment 14102. (a) In this subtitle the following words have the meanings indicated.

(b) Coalbed methane means methane and any other gaseous substance occurring in or produced from a coal seam or related, associated, or adjacent rock materials. (c) County includes Baltimore City unless otherwise indicated.

A029-1213 360 370 380 390 400 410 420 430 440 450 460 470 480 490 500 510 520 530 540 550 560 570 580 590 600 610 620 630 640 650 660 670 680 (d) (e) pools. (f) Fund means the Oil and Gas Fund. Department means the Department of the Environment. Field means the general area underlaid UNDERLAIN by one or more

(g) Gas means all natural gas, NATURAL GAS LIQUIDS, and other fluid hydrocarbons, not defined as oil, which are produced from a natural reservoir. (G1) (1) GAS INTEREST MEANS THE RIGHT TO EXPLORE FOR GAS ON, OR PRODUCE GAS FROM, REAL PROPERTY. (2) GAS INTEREST DOES NOT INCLUDE A FEE SIMPLE INTEREST IN THE SURFACE RIGHTS OF REAL PROPERTY REGARDLESS OF WHETHER THE FEE INTEREST INCLUDES THE MINERAL RIGHTS. (G2) MARCELLUS SHALE MEANS A MIDDLE DEVONIAN-AGE, BLACK, LOW-DENSITY, CARBONACEOUS SHALE THAT: (1) OCCURS THROUGHOUT THE ALLEGHENY PLATEAU REGION OF THE NORTHERN APPALACHIAN BASIN; AND (2) UNDERLIES PARTS OF GARRETT COUNTY, ALLEGANY COUNTY, AND WASHINGTON COUNTY. (G-3) NATURAL GAS LIQUIDS MEANS COMPONENTS OF NATURAL GAS THAT ARE LIQUID AT THE SURFACE IN FIELD FACILITIES OR GASPROCESSING PLANTS. (h) Oil means crude petroleum oil and other hydrocarbons, regardless of gravity, which are produced at the wellhead in liquid form, except NATURAL GAS LIQUIDS OR liquid hydrocarbons known as distillate or condensate recovered or extracted from gas. (i) Owner mans the person who has the right to drill into and produce from a pool, or to store in a pool, and appropriate the oil or gas the person produces or stores either for the person or others. (j) Person means any individual, corporation, association, partnership, receiver, trustee, executor, administrator, guardian, fiduciary, or other representative of any kind. : (1) THE FEDERAL GOVERNMENT, THE STATE, A COUNTY, A MUNICIPAL CORPORATION, OR ANY OTHER POLITICAL SUBDIVISION OF THE STATE, OR ANY OF THEIR UNITS;

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(2) AN INDIVIDUAL, A RECEIVER, A TRUSTEE, A GUARDIAN, AN ADMINISTRATOR, A FIDUCIARY, OR A REPRESENTATIVE OF ANY KIND; OR (3) A PARTNERSHIP, A FIRM, AN ASSOCIATION, A PUBLIC OR PRIVATE CORPORATION, OR ANY OTHER ENTITY. (k) Pool means an underground reservoir containing a common accumulation of oil, gas, or both. (l) both. (m) gas well. Product means any commodity produced in its natural state by an oil or Production means the act or process of producing oil or gas from Production does not include the sale or distribution of oil or gas. Producer means the owner of a well capable of producing oil, gas, or

(n) (1) a natural reservoir. (2)

(o) (1) Underground storage means the storing of gas or oil in a geological stratum beneath the surface of the earth. (2) Underground storage includes the injection of gas or oil into and withdrawal from an underground storage reservoir and any other operation necessary for or convenient to the storage of gas or oil. (p) Underground storage reservoir means the stratum and subsurface area that are used or are to be used for or in connection with the underground storage of gas or oil. 14107.1. (A) IN THIS SECTION, EXECUTIVE ORDER MEANS EXECUTIVE ORDER 01.01.2011.11, ISSUED ON JUNE 6, 2011, BY THE GOVERNOR. (B) THE DEPARTMENT MAY NOT ISSUE A PERMIT UNDER THIS SUBTITLE FOR THE HYDRAULIC FRACTURING OF A WELL FOR THE EXPLORATION OR PRODUCTION OF NATURAL GAS UNTIL: (1) EACH REQUIREMENT UNDER THE STUDY REQUIRED UNDER THE EXECUTIVE ORDER IS SATISFIED; (2) 18 MONTHS HAS PASSED AFTER THE DATE THE STUDY

A029-1213 1000 REQUIRED UNDER THE EXECUTIVE ORDER IS ISSUED; AND 1010 (3) THE DEPARTMENT HAS ADOPTED REGULATIONS IN 1020 ACCORDANCE WITH SUBSECTION (E) OF THIS SECTION. 1030 1040 1050 1060 1070 (C) (1) THE DEPARTMENT AND THE DEPARTMENT OF NATURAL RESOURCES SHALL ISSUE A RISK ASSESSMENT OF PUBLIC HEALTH AND ENVIRONMENTAL HAZARDS RELATING TO HYDRAULIC FRACTURING ACTIVITIES, AT THE SAME TIME THE FINAL REPORT REQUIRED UNDER THE EXECUTIVE ORDER IS ISSUED.

1080 (2) THE RISK ASSESSMENT REQUIRED UNDER PARAGRAPH 1090 (1) OF THIS SUBSECTION SHALL INCLUDE: 1100 (I) THE RISK OF PUBLIC HEALTH AND 1110 ENVIRONMENTAL HAZARDS CLASSIFIED ON THE FOLLOWING BASIS: 1120 1. 1130 ENVIRONMENTAL EFFECT; 1140 2. 1150 ENVIRONMENTAL EFFECT; 1160 3. 1170 ENVIRONMENTAL EFFECT; 1180 4. 1190 ENVIRONMNTAL EFFECT; SLIGHT PUBLIC HEALTH OR

MINOR PUBLIC HEALTH OR

MODERATE PUBLIC HEALTH OR

MAJOR PUBLIC HEALTH OR

1200 5. CATASTROPHIC PUBLIC HEALTH OR 1210 ENVIRONMENTAL EFFECT; AND 1220 6. INSUFFICIENT DATA AVAILABLE; AND

1230 (II) THE PROBABILITY OF A HAZARD OCCURRING 1240 CLASSIED ON THE FOLLOWING BASIS: 1250 1260 1270 1280 1290 1. RARE; 2. OCCASIONAL; 3. PERIODIC; 4. FREQUENT; AND 5. INSUFFICIENT DATA AVILABLE.

A029-1213 1300 1310 1320 1330 1340 (D) (1) ON WRITTEN REQUEST FROM A REPRESENTATIVE OF THE NATURAL GAS DRILLING INDUSTRY, THE DEPARTMENT MAY ESTABLISH AND COLLECT A FEE TO PROVIDE THE FUNDING NECESSARY FOR THE COMPLETION OF THE STUDY REQUIRED UNDER THE EXECUTIVE ORDER.

1350 (2) A FEE ESTABLISHED UNDER PARAGRAPH (1) OF THIS 1360 SUBSECTION SHALL: 1370 (I) BE COLLECTED FROM AN OWNER OF A GAS 1380 INTEREST IN REAL PROPERTY THAT: 1390 1. IS LOCATED IN AN AREA OF THE STATE 1400 UNDERLAIN BY THE MARCELLUS SHALE; AND 1410 2. WAS ACQUIRED AFTER JANUARY 1, 2007, 1420 FOR THE PURPOSE OF EXPLORATION OR PRODUCTION OF NATURAL GAS; 1430 AND 1440 (II) APPLY TO EACH ACRE OF REAL PROPERTY IN 1450 WHICH OWNER HAS A GAS INTEREST. 1460 1470 (E) THE DEPARTMENT SHALL ADOPT REGULATIONS THAT: (1) ARE SPECIFIC TO HYDRAULIC FRACTURING;

1480 (2) INCLUDE ANY RESTRICTIONS PR PROHIBTIONS ON 1490 HYDRAULIC FRACTURING ACTIVITIES DEEMED NECESSARY BY THE 1500 DEPARTMENT TO PROTECT PUBLIC HALTH AND THE ENVIRONMENT; AND 1510 (3) ARE AT LEAST AS PROTECTIVE OF PUBLIC HEALTH AND 1520 THE ENVIRONMENT AS RECOMMENDED IN: 1530 (I) THE FINAL FINDINGS AND RECOMMENDATIONS 1540 OF THE STUDY REQUIRED UNDER THE EXECUTIVE ORDER; AND 1550 (II) THE RISK ASSESSMENT REQUIRED UNDER 1560 SUBSECTION (C) OF THIS SECTION. 1570 1580 1590 1600 1610 SECTION 2. AND BE IT FURTHER ENACTED, That it is the intent of the General Assembly that the study under Executive Order 01.01.2011.11, issued on June 6, 2011, by the Governor, be fully funded in order for the Department of the Environment and the Department of Natural Resources to satisfy each study item under the executive order.

A029-1213 1620 1630 1640 1650 1660 1670 SECTION 3. AND BE IT FURTHER ENACTED, That the Department of the Environment and the Department of Natural Resources shall jointly brief the House Environmental Matters Committee and the Senate Education, Health, and Environmental Affairs Committee within 90 days after the final report required under Executive Order 01.01.2011.11, issued on June 6, 2011, by the Governor, and the risk assessment required under 14107.1(c), as enacted by this Act, is issued.

1680 SECTION 4. AND BE IT FURTHER ENACTED, That it is the intent of the 1690 General Assembly to: 1700 (1) continue to monitor the issues relating to hydraulic fracturing;

1710 (2) review the final findings and recommendations of the study 1720 required under Executive Order 01.01.2011.11, issued on June 6, 2011, by the Governor, 1730 (3) review the risk assessment required under 14107.1(c), as 1740 enacted by this Act; and 1750 (4) determine if modification to this Act is necessary, including: extending the moratorium to enable additional study of

1760 (i) 1770 hydraulic fracturing; 1780 1790 the State; or 1800 (ii)

lifting the moratorium to authorize hydraulic fracturing in

(iii)

imposing a ban on hydraulic fracturing in the State.

1810 SECTION 5. AND BE IT FURTHER ENACTED, That this Act shall take 1820 effect June 1, 2013. 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 MANDATES: Martin OMalley, Governor of Maryland Sen. Joan Carter Conway, Chair, Senate Committee on Education, Health, and Environmental Affairs Sen. Roy P. Dyson, Vice-Chair, Senate Committee on Education, Health, and Environmental Affairs Sen. Joanne C. Benson, Member, Senate Committee on Education, Health, and Environmental Affairs Sen. Bill Ferguson, Member, Senate Committee on Education, Health, and Environmental Affairs Sen. J. B. Jennings, Member, Senate Committee on Education, Health, and Environmental Affairs Sen. Karen S. Montgomery, Member, Senate Committee on Education, Health, and Environmental Affairs Sen. Paul G. Pinsky, Member, Senate Committee on Education, Health, and Environmental Affairs

A029-1213 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 2110 2120 2130 Sen. Edward R. Reilly, Member, Senate Committee on Education, Health, and Environmental Affairs Sen. James C. Rosapepe, Member, Senate Committee on Education, Health, and Environmental Affairs Sen. Bryan W. Simonaire, Member, Senate Committee on Education, Health, and Environmental Affairs Sen. Ronald N. Young, Member, Senate Committee on Education, Health, and Environmental Affairs Sen. Robert A. Zirkin, Member, Senate Committee on Judicial Proceedings Sen. Jamin B. Raskin, Member, Senate Committee on Judicial Proceedings Del. Maggie McIntosh, Chair, House of Delegates Committee on Environmental Matters Del. Heather R. Mizeur, Member, House of Delegates Committee on Appropriations

SPONSOR: Rachel OKeeffe, Hood College Delegation