The following bill, which has been introduced previously, has been acted upon by the General Assembly since the last Legislative Activity Update:

PA House Bill 1391 – Amendments to Oil and Gas Lease Act

Sponsor: Garth D. Everett (Republican – parts of Lycoming and Union counties [northern Pennsylvania])
Overview: Adds definitions for “lessee,” “lessor,” “operator,” “production unit,” “royalty,” “royalty payment,” “unconventional formation,” and “unconventional gas well.”

Requires that the minimum royalty payment to a lessor shall not be less than one-eighth of the price received by operator.

Prohibits deductions for “any” costs that would reduce royalty below one-eighth.

Applies to existing and future leases.

Provides civil remedy for failure to pay minimum royalty, including an award of attorney fees and treble damages if operator was notified by lessor of deficient payments and failed to cure within 60 days.

Current Status: Reported out of the House Committee on Environmental Resources and Energy (20 to 7) on June 27, 2016.

Reported out of the House Rules Committee on September 19, 2016.

The following bills have been introduced since the last Legislative Activity Update:

PA House Bill 2275 – Changes to Environmental Quality Board membership
Sponsor: Cris Dush (Republican – Jefferson County and part of Indiana County [western Pennsylvania])
Overview: Changes composition of the Environmental Quality Board (“EQB”) and removes from the EQB the Secretary of the Department of Environmental Protection (“DEP”).  Secretary of DEP previously had been included as the chair of the EQB.
Current Status: Referred to House Committee on Environmental Resources and Energy on August 5, 2016.

 

PA House Bill 2277 – Amendment to Oil & Gas Act related to bonding requirements
Sponsor: Thomas P. Murt (Republican – parts of Montgomery and Philadelphia Counties)
Overview: Adds Section 3225.1 to the Oil & Gas Act to require liability bonding in amount of $2,000,000 for unconventional wells.

Bond must be filed at time of permit application or before continuing to operate unconventional well.

Bond must cover remediation liabilities.

“In lieu of individual bonds for each well, an owner or operator may file a blanket bond in an amount equal to 20% of the sum total for all individual bonds that would otherwise be required of the operator.”

“Liability under the bond shall continue until any release has been properly remediated and the well has been properly plugged in accordance with this chapter and for a period of two years after filing of the certificate of plugging with the [D]epartment [of Environmental Protection].”

Provides alternative bond and fee arrangement for owners/operators who cannot obtain a sufficient bond.

Current Status: Referred to House Committee on Environmental Resources and Energy on August 5, 2016.

 

PA House Bill 2319 – Amendment to Oil & Gas Lease Act
Sponsor: Cris Dush (Republican – Jefferson County and part of Indiana County [western Pennsylvania])
Overview: Adds definitions for “royalty” and “wellhead.”

“Royalty” is defined as “[a] lessor’s ownership interest in the oil, natural gas or gas of any other designation produced from below a specific tract of real property, which interest is valued at the wellhead free of expenses of production and transportation.”

“Wellhead” is defined as “[t]he point at which oil, natural gas or gas of any other designation reaches the ground surface or departs from the subject real property for which a lease or other such agreement conveys from the lessor to the lessee the right to remove or recover oil, natural gas or gas of any other designation.”

Current Status: Referred to House Committee on Environmental Resources and Energy on September 9, 2016.

 

PA House Bill 2361 – Pennsylvania Turnpike Right-of-Way Act
Sponsor: Scott A. Petri (Republican – part of Bucks County [outside Philadelphia])
Overview: Allows for granting, upon proper application and approval, of right-of-way through land owned by Pennsylvania Turnpike Commission (“Commission”) for “pipeline purposes for the transportation of materials.”

Provides detailed application requirements, including provision for public hearings where appropriate.

Requires Commission to issue regulations or impose stipulations concerning environmental protection, including: restoration of land; protection of air and water quality standards; prevention of damage to the environment, property, and health and safety.

Requires annual inspection by Secretary of Transportation of all pipelines and related facilities on land owned by Commission.

Right-of-way may not exceed 50 feet unless Commission finds that a wider right-of-way is necessary.

Duration of right-of-way is limited to “reasonable term” in light of all circumstances and may not exceed 50 years.

Pipelines constructed pursuant to act shall be “constructed, operated and maintained as common carriers.”

Requires Commission to promulgate regulations related to liability.

Current Status: Referred to the House Committee on Environmental Resources and Energy on September 22, 2016.