AN ACT

 

1Providing for protection for a royalty interest owner of natural
2gas rights who reports a violation or suspected violation of
3a contractual agreement and for remedies and penalties.

4The General Assembly of the Commonwealth of Pennsylvania
5hereby enacts as follows:

6Section 1. Short title.

7This act shall be known and may be cited as the Natural Gas
8Lease Anti-Retaliation Act.

9Section 2. Definitions.

10The following words and phrases when used in this act shall
11have the meanings given to them in this section unless the
12context clearly indicates otherwise:

13"Good faith action." A claim, demand or complaint intended
14to secure rights granted under a lease or to determine whether
15the terms of a lease are being complied with, including, but not
16limited to, a request for an accounting of any costs, taxes or
17fees allowed to be deducted from royalty payments by lessee,
18that is made without malice or ulterior motive and which the

1lessor or a party acting on the lessor's behalf reasonably
2believes to be valid and legally correct.

3"Lessee." Any person who has obtained the right to explore,
4drill, stimulate, produce, market and sell oil, gas and natural
5gas liquids, or any portion thereof, pursuant to a properly
6executed lease.

7"Lessor." The owner of the oil and gas in place, who
8controls the oil and gas rights and has executed a lease.

9Section 3. Protection of royalty interest owners.

10No lessor may retaliate by ceasing development or production
11or take other reprisals against a lessor because a lessor takes
12a good faith action, as defined in this act.

13Section 4. Remedies.

14(a) Civil action.--A person who alleges a violation of
15section 3 may bring a civil action in a court of competent
16jurisdiction for appropriate injunctive relief or damages, or
17both, within one year after the occurrence of the alleged
18violation.

19(b) Necessary showing of evidence.--A lessor alleging a
20violation of this act must show by a preponderance of the
21evidence that its action meets the definition of a good faith
22action and that a retaliatory action was taken by the lessee
23after it became aware of the good faith action of the lessor.

24(c) Defense.--It shall be a defense to an action under this
25section if the lessee proves by a preponderance of the evidence
26that the action by the lessee was authorized under the terms of
27the lease or occurred for legitimate business reasons.

28Section 5. Enforcement.

29A court that finds in favor of the lessor shall order the
30lessee to pay appropriate damages to the lessor and may impose a
 

1civil fine of up to $1,000 per day for each day the provisions 
2of section 3 have been violated. A court which finds that an 
3action has been instituted for other than a good faith action as 
4defined in this act may order the lessor to pay reasonable 
5damage to the lessee.

6Section 6. Effective date.

7This act shall take effect in 60 days.