1Amend Bill, page 2, line 19, by inserting before "A"

2(a)

3Amend Bill, page 2, by inserting between lines 24 and 25

4(b) The lessee shall compute and pay oil and gas royalties
5due under each lease on the gross proceeds received by the
6seller based on the fair market value at the point of sale. The
7lessee shall not deduct from royalties any severance taxes,
8impact fees imposed under 58 Pa.C.S. Ch. 23 (relating to
9unconventional gas well fee) or applicable fees charged by any
10Commonwealth agency or department, or any post-production costs.
11Post-production costs include:

12(1) All losses of produced volumes, whether by use as
13fuel, line loss, flaring, venting or otherwise.

14(2) All costs actually incurred by the lessee from and
15after the wellhead to the point of sale, including, without
16limitation, all gathering, dehydration, compression,
17treatment, processing, marketing and transportation costs
18incurred in connection with the sale of such production.

19(c) For the purpose of computing and paying royalties, the
20fair market value shall be presumed to be the gross proceeds
21received pursuant to a bona fide contract entered into by
22nonaffiliated parties of adverse economic interests. If a
23contract is not negotiated at arm's length or was between
24affiliated parties, the presumption that market value is equal
25to gross proceeds shall not apply, and the lessee shall have the
26burden to establish that royalties paid are based on market
27value. Parties are affiliated under this subsection if they are
28related by blood, marriage or common business enterprise, are
29members of a corporate affiliated group or where one party owns
30a 10% or greater interest in the other.

31(d) Nothing in subsection (b) shall be construed to amend or
32alter the provisions of an existing lease agreement between a
33lessor and a lessee entered into prior to the effective date of
34this subsection. The provisions of subsection (b) shall apply to
35new or modified leases between a lessor and a lessee entered
36into on or after the effective date of this subsection.