House Members Continue Work On Gas Well Royalty Legislation

Work is continuing in Harrisburg to secure passage of legislation designed to clarify the existing state law on how natural gas royalty payments to Pennsylvania landowners are calculated, according to bill sponsors, Reps. Garth Everett (R-Lycoming), Sandra Major (R-Susquehanna), Tina Pickett (R-Bradford) and Matt Baker (R-Tioga).

The Senate passed a three bill package on royalty issues Monday.

“Since we were able to move House Bill 1684 out of committee for consideration by the full chamber, efforts have been ongoing to gain additional input from our colleagues and constituents across the Commonwealth to make sure this is fair to both conventional and Marcellus natural gas land owners and operators,” said Rep. Everett. “The legislation needs to provide relief, not only to those with one-eighth leases, but to those with higher percentage agreements. This must include not just rules on how royalties are calculated but also remedies for land owners who feel that their royalties are not being calculated correctly.”

House Bill 1684, passed by the Environmental Resources and Energy Committee with bipartisan support recently, seeks not only to remedy the lease payments, but to ensure that drilling companies do not deduct excessive and unwarranted post-production costs from the payments as well.

The Pennsylvania Supreme Court in 2010 issued a ruling suggesting that the General Assembly further clarify the 1979 law on how royalty payments are calculated, and the legislation would do that.

“This is an important issue to many landowners in the northeast region and it continues to be a top priority for me and my Northern Tier colleagues as we work to make this the best bill possible to help landowners receive fair and equitable payments,” said Rep. Major. “We are diligently working with all interested parties and will continue to push for advancement of the bill.”

“This legislation is about fairness and accountability, and with the Northern Tier in the very heart of Marcellus drilling activity, it is imperative that we get this bill right so that it doesn’t encounter any other hurdles along the way,” said Rep. Pickett.

“We realize the urgency of getting this bill signed into law for our landowners, as every day that goes by some of them are potentially losing money,” said Rep. Baker. “However, we also need to make sure we have a good solid bill that will garner the support needed to see it through to the governor’s desk.

The bill is on the House calendar awaiting second consideration, which involves the process of adding amendments.

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