S T A T E   O F   N E W   Y O R K
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                                  2872

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                            January 18, 2013
                               ___________

Introduced  by  M. of A. GRAF, MONTESANO, RAIA, CURRAN, SALADINO -- read
  once and referred to the Committee on Environmental Conservation

AN ACT to amend the  environmental  conservation  law,  in  relation  to
  establishing  a  set-aside  for power generated through the process of
  hydraulic fracturing

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

  Section  1.  The environmental conservation law is amended by adding a
new section 23-0505 to read as follows:
S 23-0505. HYDRAULIC FRACTURING RESERVE.
  1. FOR PURPOSES OF THIS SECTION, "HYDRAULIC FRACTURING" MEANS A  PROC-
ESS  USED  TO CREATE FRACTURES IN ROCK BY MAN-MADE FRACTURING TECHNIQUES
FOR THE PURPOSES OF STIMULATING NATURAL GAS OR OIL WELL PRODUCTION.
  2. FOR ALL HYDRAULIC FRACTURING PERMITS ISSUED UNDER THIS  TITLE,  TEN
PERCENT  OF NATURAL GAS OR WELL OIL PRODUCED AS THE RESULT OF SUCH PROC-
ESS SHALL BE DIVERTED TO THE HYDRAULIC FRACTURING  RESERVE,  ESTABLISHED
IN  SUBDIVISION  THREE  OF THIS SECTION. THE CONTRIBUTION OF GAS OR WELL
OIL MANDATED BY THIS SECTION SHALL BE AT NO COST TO THE STATE AND  SHALL
NOT  BE  REIMBURSED EXCEPT IN THE INCIDENTAL EXPENSES INCURRED IN TRANS-
PORTATION OF SUCH GAS OR OIL IN ACCORDANCE WITH THIS SECTION.
  3. THE COMMISSIONER SHALL ESTABLISH A RESERVE  TO  RECEIVE  AND  STORE
NATURAL  GAS  AND WELL OIL PRODUCED AS A RESULT OF HYDRAULIC FRACTURING.
SUCH RESERVE SHALL BE FOR THE EXCLUSIVE USE OF THE VARIOUS POWER AUTHOR-
ITIES OF THE STATE. THE COMMISSIONER, IN HIS  OR  HER  SOLE  DISCRETION,
SHALL DISTRIBUTE THE CONTENTS OF SUCH RESERVE PROVIDED:
  A. THE NATURAL GAS OR WELL OIL DISTRIBUTED UNDER THIS SECTION SHALL BE
USED EXCLUSIVELY BY POWER AUTHORITIES FOR THE PRODUCTION OF ELECTRICITY;
AND
  B.  THE  COMMISSIONER  SHALL IMPLEMENT RULES AND REGULATIONS REGARDING
THE DISTRIBUTION OF THE RESERVE AND SHALL  DISTRIBUTE  THE  CONTENTS  OF
SUCH IN A FAIR  AND EQUITABLE MANNER.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07199-01-3
              

A. 2872                             2

  4.  ALL CONTRACTS AND PERMITS ISSUED FOR THE EXTRACTION OF NATURAL GAS
AND WELL OIL THROUGH THE PROCESS OF HYDRAULIC FRACTURING SHALL INCLUDE A
CLAUSE THAT  EXPLICITLY  DETAILS  THE  OBLIGATION  OF  THE  PRODUCER  TO
CONTRIBUTE  TEN PERCENT OF SUCH PRODUCTION AND EXTRACTION TO THE RESERVE
AT NO COST TO THE STATE.
  5.  THE  ATTORNEY  GENERAL SHALL BE RESPONSIBLE FOR THE ENFORCEMENT OF
THIS SECTION.
  S 2. This act shall take effect immediately.