Pennsylvania House of Representatives Considers New Legislation to Encourage New Energy-Related Businesses

On December 3, 2015, House Bill No. 1731, also called Keystone Energy Enhancement Act, sponsored by Pennsylvania State Representative Mike Turzai, was referred to the House Commerce Committee. The main purpose of this Bill is to establish a program supporting employment opportunities and capital investment within Pennsylvania’s natural gas, manufacturing, and petrochemical industries.

H.B. 1731 provides for the creation of a Keystone Energy Authority responsible for administering the program. The Authority would designate specific zones across the state subject to enhancement. H.B. 1731 provides three general criteria to qualify for a zone designation: a proposed zone must “(1) Have the potential to provide manufacturing business, petrochemical business or downstream business opportunities. (2) Consist of deteriorated property. (3) Have substantial real property with adequate infrastructure and access to natural gas and natural gas liquids to support new or expanded development” as well as additional requirements.

Furthermore, the program would provide state and local tax benefits to eligible natural gas, manufacturing, petrochemical and downstream businesses, such as “tax exemptions, deductions, abatements, and credits for a 10 year period beginning January 1, 2017.” These businesses would also receive tax benefits depending on their employment rate.

If passed, the Keystone Energy Enhancement Act would become immediately effective following the Governor’s signature.

Written by Chloe Marie - Research Fellow

12/09/2015

Three bills introduced to the PA House Environmental Resources and Energy Committee to Update the Oil and Gas Lease Act

On September 16, 2013, three bills were introduced to the House of Representatives for the Pennsylvania General Assembly that would amend the act of July 20, 1979 (P.L. 183, No. 60), known as the Oil and Gas Lease Act, added July 9, 2013 (P.L. 473, No. 66). They were each forwarded to the House Environmental Resources and Energy Committee.

House Bill 1650 proposes amended language under the Oil and Gas Lease Act that deals with information that well operators are required to supply to landowners. HB 1650 includes definitions for “affiliated parties” under the Act, and also included more detailed requirements for reporting the calculation of royalties and deductions under the Act. The Bill was introduced by Representative White.

House Bill 1684 proposes amended language under the Oil and Gas Lease Act that would prohibit the deduction of severance or other production taxes when calculating royalties. Additionally, it proposed a Construction sub-section that would prevent the Act from being interpreted to preclude enforcement of leases that guaranteed lessor’s a greater than one eighth royalty under the first marketable product doctrine. The Bill was introduceds by Representative Everett.

Lastly, House Bill 1700 proposes amended language under the Oil and Gas Least Act that states the function of “multiple contiguous leases” in the language added as a result of Act 66 of 2013. The bill provides:

 “In cases where an operator has the right to develop multiple contiguous leases separately and proceeds to develop the leases jointly when not expressly permitted by the leases, the leases may be declared null and void at the lessor’s discretion and may be renegotiated at the lessor’s discretion.”

The language would also clarify that forced pooling or unitization, as defined, was not implemented by the Act. The Bill was introduced by Representative White.

Written by: Garrett Lent, Research Assistant

Agricultural Law Resource and Reference Center

September 2013

PA Representative announces plans to repeal “pooling” laws

On August 12, 2013, Pennsylvania State Representative Michele Brooks issued a co-sponsorship memo in which she expressed plans to repeal “involuntary pooling” provisions in the Oil and Gas Law Conservation Law (Act 359 of 1961).  The “involuntary pooling” provisions referred to by Brooks pertain to drilling that breaches the Onondaga horizon. Additionally, the memo laid out plans to propose legislation repeal Section 2.1 of Act 66 of 2013 (SB 259). Section 2.1 gave well operators the right to jointly operate multiple contiguous leases that do not contain an express prohibition of joint operation.

Written by: Garrett Lent, Research Assistant

Agricultural Law Resource and Reference Center

August 2013

PA House Passes Bill to Update the Required Check Stub Information for Well Royalties

On June 11, 2013, the Pennsylvania House of Representatives passed HB 1414, which would change the information well operators are required to include on check stubs for royalty payments to landowners. Section 3.1 of HB 1414 would require specific well production, pricing, tax, and sale information to be attached to royalty payments to landowners, unless another basis for regularly providing this information is already in place. In his co-sponsorship memorandum, Rep. Everett stated the bill responded to landowner frustrations surrounding a lack of clarity in royalty payment calculations. The Senate has not yet voted on the bill.

For more information on the changes, as well as the bill text, visit the Pennsylvania General Assembly’s website.

Written by: Garrett Lent, Research Assistant

Penn State Law, Agricultural Law Center

June 2013