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Check out the Active Legislation Update!
July 19, 2010
Legislation:
With the General Assembly on break we can take a look at the various pieces of legislation that have seen some action and are pending in the House and Senate.
House:
HB 1436 (White). The bill amends the Title to Mineral Rights Act providing that mineral rights in real property shall be deemed abandoned after a period of ten years of nonuse of the mineral rights by a subsurface owner, unless the subsurface owner, within three years of the effective date of the bill or ten years from the nonuse; provide for the right of surface owner to record claim; provide guidelines for the filing of statement of claim. The bill was reported from the House Environmental Resources and Energy Committee and is currently in House Rules.
SB 298 (Yaw) remains in House Appropriations. The bill amends the Farmland & Forest Land Assessment Act (Clean & Green) further providing for definitions, general responsibilities of county assessors, split-off, separation or transfer & roll-back taxes; & providing for removal of land from preferential assessment. The bill received two amendments. The first removed the sections dealing with wind. The second amendment limited the lease to two years and made it non-renewable. Representative Houghton’s bill HB 1394 is in the Senate and was amended to remove the oil and gas provisions and deal with wind power.
HB 2213 (George): The bill would require the DEP to inspect Marcellus well sites during each drilling phase; extend to 2,500 feet, from 1,000 feet, the presumed liability of a well polluting a water supply; require disclosure of the chemicals used in the hydraulic fracturing of natural gas from the earth; update bonding requirements to cover the costs of decommissioning a well; clarify local governments' traditional authority to regulate oil and gas activities. To read the bill, click here. The bill is currently in the House Appropriations Committee.
HB 2214 (George) The bill requires that the royalty calculation in any oil and gas leases must exclude all post production expenses and that the royalty is to be based on the gross proceeds received at the point of sale in a competitive, arms-length bargain. The bill is currently in the House Appropriations Committee.
Severance Tax:
HB 325 (Melio). This bill as amended creates the tax at rate of 8 percent of the value at the wellhead plus 8 cents per 1,000 cubic feet of natural gas extracted. Wellheads producing less than 60,000 cubic feet of gas per day would be exempt. The bill was re-referred to the House Appropriations Committee.
HB 1489 (George). The bill was amended to change the severance tax rate to .35 per 1000 cubic feet. The distribution of funds was changed and a job creation tax credit was added. To read a detailed summary of the amendment, click here. The bill was re-referred to the House Appropriations Committee.
An agreement that was announced was that consideration of a severance tax would be taken up and enacted prior to October 1st. Some in the Senate said they did not want the tax discussions part of the budget agreement that was reached because they did not want the discussions on the details driven by a number but rather by a public policy decision that would address the competitiveness of PA under various proposals. In his post budget agreement press conference Governor Rendell suggested that he still favors an approach similar to the one in place in West Virginia but acknowledged that there had been no discussions on the details at that point. His expectation was that negotiations would be held over the summer.
Equally or more challenging than the details of the tax will be the details of the distribution of revenue!
HB 1205 (Pickett)… Extends distance for presumption of liability, extends timeframe for liability of damage and requires test prior to and after drilling. The bill was reported from the House Environmental Resources & Energy Committee and is in House Appropriations.
HB 1155 (George)… The Act deals with damages, disclosure, agreements, installation and operation, duties of owners and the DEP. The bill was reported from the House Environmental Resources & Energy Committee and is in House Appropriations.
Senate:
SB 1374 (White) remains in Senate Appropriations. The bill amends the act of December 18, 1984 (P.L.1069, No.214), known as the Coal and Gas Resource Coordination Act, further providing for definitions and for minimum distance between gas wells. Currently, Act 214 prohibits drilling of oil and gas wells closer than 1,000 feet in coal-bearing areas, precluding the drilling of multiple, closely-spaced horizontal wells from the same drilling pad, a practice which is more economical, leaves a smaller environmental footprint, and is less intrusive on minable coal reserves. The bill was reported by the Senate Environmental Resources & Energy Committee and is in Senate Appropriations. Action is likely in the fall.
HB 1128 (Preston)… Raises violations of gas pipeline violations to $100k per day and caps the fines at $1m. The bill has been passed by the House and is in the Senate Consumer Protection and Professional Licensure Committee.
HB 2235 (Vitali)…Proposes a ban on the leasing of additional state lands. The bill has been passed by the House and is in the Senate Environmental Resources and Energy Committee.
SB 1092 (Kasunic) has received first consideration and is now in the Senate Appropriations Committee. The original bill required the operator to provide the DEP with a cement quality log or other approved method to ensure the adequacy of the cement used to encase the well. The bill was amended by striking the existing language and inserting requirements that the Environmental Quality Board promulgate regulations governing the design, construction, completion and operation of oil and gas wells to minimize the threat that migration of gas or fluids present to drinking water supplies and public safety. The bill is in Senate Appropriations.
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