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Protection Bills Approved by Senate Committee

March 16, 2014
HARRISBURG – Legislation aimed at expanding the rights of landowners who are currently leased with natural gas companies was approved today by the Senate Environmental Resources and Energy Committee, according to Committee Chairman Gene Yaw (R-23).

The legislation, known as the Oil and Gas Lease Protection Package, consisted of three bills:

The first bill, Senate Bill 1236, would expand upon the Oil and Gas Lease Act by allowing royalty interest owners the opportunity to inspect records of natural gas companies to verify proper payments. In addition, the bill was amended in committee to require all royalty payments be made within 60 days of production unless otherwise stated in the contract.  Any delinquent payments are to be paid with interest.

The second bill, Senate Bill 1237, would prohibit a gas company from retaliating against any royalty interest owner by terminating their lease agreement or ceasing development on leased property because a royalty interest owner questions the accuracy of current royalty payments.  Companies found to have violated the provisions of this act face civil penalties of up to $1,000 per day.

The third bill, Senate Bill 1238, would require a gas company to record a surrender document in the county Recorder of Deeds office where the oil and gas well is located within 30 days upon expiration, termination, or forfeiture of an oil and gas lease. The surrender document will release the gas company’s interests in the oil and gas. This is similar to what a mortgage company would be required to do after a mortgage was paid in full.

“The goal here is to provide more weapons for landowners to level the playing field with gas producers,” Yaw said.  “Hopefully, these bills, along with other legislative and investigative efforts, will resolve many of the royalty issues which have been brought to the attention of legislators.”

The Committee also approved Senate Bill 1155, sponsored by Senator Joe Scarnati, which amends the Surface Mining Conservation and Reclamation Act to create an Aggregate Advisory Board, and Senate Bill 1254, sponsored by Senator John Yudichak, which will further reduce the amount of lead in plumbing fixtures and reduce exposure to lead in tap water.

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