04/22/24 - 117 New Stories - REAL Environmental & Conservation Leadership In PA: http://tinyurl.com/9bh4zbtr
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Sen. Yaw's Legislative Priorities Center On Marcellus Shale Issues
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As the Senate begins a new legislative session, Sen. Gene Yaw (R-Lycoming) has introduced a number of bills that address issues relating to the growing Marcellus Shale industry in Pennsylvania, closing loopholes in Megan's Law and further reforming practices in state government. Sen. Yaw said much of the new legislation he is sponsoring has been prompted by the booming natural gas drilling industry in his district, which is bringing both economic development and new challenges to Pennsylvania's landowners and municipal officials.
"Our area is at the epicenter for Marcellus Shale-related activity, and as a result we are seeing some of the issues that come along with it here first. Because of this, I feel it is necessary for me to come out and craft legislation to protect communities and encourage well-regulated growth," Sen. Yaw said. "And frankly, the majority of these bills are directed toward benefitting the landowners."
Among those bills are the following:
-- Pugh Clause In Developing Tracts: Legislation which would stop the practice of tying up large tracts of land by including only a few acres in a production unit. According to Yaw, under today's laws, utilizing as little as two or three acres in a production unit could hold 200 or 300 acres with no obligation to develop the gas under that land.
Sen. Yaw proposes what is known as a Pugh Clause in his legislation. This would apply to all production units formed after adoption of the legislation. This provision would provide the landowners and gas companies the option to develop the acreage not included in a production unit, allow the lease to expire with respect to the unused portion, renegotiate the lease as to the unused land or include the unused land in another production unit.
"I see no harm whatsoever to gas companies but I see a great benefit to landowners," said the Senator.
-- Company to company pooling is another proposal Sen. Yaw will be introducing. Encouraging development of the Marcellus Shale with a minimum number of well sites provides well-known environmental benefits. What has been discovered is that the majority of pooling issues involve inter-company dealings with leased land.
For example, one company declines to cooperate in developing a leased area for its own competitive advantage to the detriment of the environment and stranded landowners whose gas development may be blocked by the uncooperative company.
Unlike earlier pooling suggestions, this type of pooling would affect only leasehold interests and would have no impact on private landowners who decline to lease their land. Yaw said, "I am told that this type of pooling will solve about 90 percent of the pooling issues. If I can solve 90 percent of any issue, I will be extremely satisfied with the result."
-- Certified Metering Devices: Another proposal affecting the natural gas industry would include a requirement to have state certification of all metering devices on Marcellus Shale wells.
Sen. Yaw related, "Pennsylvania requires state certification on scales to buy meat and on pumps to dispense gasoline, but meters used to measure production data on which royalty payments to landowners are based are exempt. It seems as though we have a huge void in this area which needs to be addressed."
-- Beneficiaries of royalty payments felt it was very difficult to understand just what charges were being made on their net earnings. Therefore, a detailed listing of all deductions on royalty payment check stubs would be required under another proposal sponsored by Sen. Yaw. "What we intend here is to standardize the information so that all royalty recipients are dealing with the same, easy to understand information."
-- Abandoned Mineral Rights: Due to the thorough manner in which the gas companies search real estate titles, a significant problem with abandoned rights has surfaced. It is not unusual to find situations where as long as 100 years ago, gas and mineral rights were reserved by a prior landowner. In some instances, these individuals may have died without exercising the rights and without paying any of the real estate taxes. Therefore, the reservation continues in perpetuity, creating a cloud on the title of the current landowner.
In many cases, it is impossible to track down an owner and a lengthy court process known as an "Action to Quiet Title" is required. Under Sen. Yaw's proposed legislation, nonuse of gas or mineral rights for a period of 21 years would be considered an abandonment of those rights, thus vesting them in the owner of the surface rights. This is consistent with the 21 year time period in Pennsylvania's adverse possession law.
Many municipalities and school districts have brought forth the need to have some method by which they can be compensated for the direct impacts created by the growing gas industry.
"Virtually every state agency expects a share of this tax, whether they need it or not. Several state agencies already benefit from natural gas development, either directly through bonus payments and royalties received on gas wells on their property or indirectly by servicing the needs of the industry. Why shouldn't those agencies use the income derived from the gas industry for their purposes instead of taking more tax money?" stated Sen. Yaw.
-- Taxing Royalty Interests: Proposed legislation would grant authority to counties to assess royalty interests as real estate. This would apply only to producing wells. Until 2002, gas wells were subject to the assessment laws in Pennsylvania, but the Pennsylvania Supreme Court ruled that gas wells were not to be included in the law. This legislation would fill the hole noted by the Supreme Court.
"It appears that some sort of tax or fee is inevitable. Under this legislation, the taxing authority would be local and all of the funds derived from an assessment would stay within our local governments where impacts are tangible. I believe this is the best option rather than sending our money to Harrisburg and standing in line with our hand out, hoping to get a little back," according to Sen. Yaw.
A proposal to correct a problem with the Hotel Occupancy Tax related to Marcellus Shale workers is also a part of Sen. Yaw's legislative initiatives.
-- Senate Bill 300 -- Currently, counties are authorized to levy a 3 percenttax on room rentals of 30 days or less. Many companies book rooms for 60 days to 6 months for employees thus making the transaction exempt from the taxing authority. Money collected from this tax is used by counties to promote tourism. Under the Senator's bill, long term rentals by companies would be subject to the tax.
Sen. Yaw also proposes to further amend the Clean and Green Law.
-- Senate Bill 301 -- This bill aims to further clarify how counties apply roll-back taxes on mineral rights, specifically to include Non-coal Surface Mining such as Pennsylvania Bluestone.
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2/7/2011 |
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