Oct. 28, 2016
HARRISBURG – Despite the lack of a House vote on his bill to protect natural gas drilling leaseholders, Rep. Garth Everett (R-Lycoming/Union) said today the battle to ensure landowners are paid at least Pennsylvania’s minimum royalty is not over.
“I am very disappointed this bill did not receive a full vote in the House, and I know many of my colleagues are as well,” Everett said. “I have heard from so many leaseholders who are being short-changed on their royalties, and it simply isn’t fair or right. I will continue to fight on their behalf until this issue is resolved.”
House Bill 1391 would have protected leaseholders by guaranteeing that a minimum royalty payment for unconventional gas well production would not be less than one-eighth (12.5 percent) of the value of the natural gas extracted from their property. Some companies have been reducing royalty payments by deducting what are known as post-production costs and thereby paying less than Pennsylvania’s statutory minimum. The bill would have eliminated that practice by prohibiting deductions of any costs that result in a royalty payment less than the required one-eighth.
“Pennsylvania enacted a minimum royalty law in 1979 that simply says that the minimum royalty in Pennsylvania for gas and oil shall be one-eighth. Post-production costs did not exist in the industry at that time, so the statute did not specifically address that issue or how exactly to calculate a royalty payment,” said Everett. “A 2010 Pennsylvania Supreme Court case states that the General Assembly is the proper branch of government to determine public policy regarding royalty valuation. Since that court decision, I and my colleagues have been seeking to clear up this issue and ensure that our landowners get paid at least the minimum they were guaranteed when they signed their leases.”
Among others, Everett said he has been consistently joined in this effort by Reps. Sandra Major (R-Susquehanna/Wayne), Matthew Baker (R-Bradford/Potter/Tioga), Tina Pickett (R-Bradford/Sullivan/Susquehanna) and Karen Boback (R-Lackawanna/Luzerne/Wyoming).
“I am disappointed we did not get the bill over the goal line in this session. However, leaseholders should rest assured that we will reintroduce it when the new session starts in January and pick up our efforts right where we left off,” said Everett.
Rep. Garth D. Everett
84th District
Pennsylvania House of Representatives
(570) 546-2084
(717) 787-5270
Contact: Raymond Smith
rsmith@pahousegop.com
(717) 7051834
Member Site:
RepEverett.com
Caucus Site:
PAHouseGOP.com