1Amending the act of July 20, 1979 (P.L.183, No.60), entitled "An 
2act regulating the terms and conditions of certain leases 
3regarding natural gas and oil," further providing for
4definitions, for payment information to interest owners<-, for 
5accumulation of proceeds from production and for conflicts;
6and providing for joint ventures and for inspection of
7records.

8The General Assembly of the Commonwealth of Pennsylvania
9hereby enacts as follows:

10Section 1. Sections 1.2, 3.2(1) <-and, 3.3 and 3.4 of the act
11of July 20, 1979 (P.L.183, No.60), known as the Oil and Gas
12Lease Act, added July 9, 2013 (P.L.473, No.66), are amended to
13read:

14Section 1.2. Definitions.

15The following words and phrases when used in this act shall
16have the meanings given to them in this section unless the
17context clearly indicates otherwise:

18"Check stub." The financial record attached to a check.

19"Division order." An agreement signed by an interest owner
 

1directing the distribution of proceeds from the sale of oil, 
2gas, casing head gas or other related hydrocarbons. The order 
3shall direct and authorize the payor to make payment for the 
4products taken in accordance with the division order.

5"Interest owner." A person who is legally entitled to
6payment from the proceeds derived from the sale of oil or gas
7from an oil or gas well located in this Commonwealth.

<-8"Joint venture." An association or any other contractual
9relationship of two or more individuals or companies engaged in
10the production of an oil or natural gas well for profit without
11actual partnership or incorporation.

12"Lessee." A person that has obtained the right to explore,
13drill, stimulate, produce, market or sell oil, gas or natural
14gas liquids pursuant to an executed lease.

15"Lessor." An owner of oil and gas in place that controls the
16oil and gas rights and executes a lease granting the right to
17explore, drill, stimulate, produce, market or sell oil, gas or
18natural gas liquids.

19"Mcf." A unit of measurement expressed by 1,000 cubic feet.

20Section 3.2. Payment information to interest owners.

21Whenever payment is made for oil or gas production to an
22interest owner, whether pursuant to a division order, lease,
23servitude or other agreement, all of the following information,
24at a minimum, shall be included on the check stub or on an
25attachment to the form of payment, unless the information is
26otherwise provided on a regular basis:

27(1) A unique property identification and the name, 
28number or combination of name and number that identifies the 
29lease, property, unit or well or wells for which payment is 
30being made; and the county in which the lease, property or
 

1well is located.

2* * *

<-3Section 3.3. Accumulation of proceeds from production.

4(a) General rule.--[Proceeds] Unless otherwise provided by 
5contract, proceeds from production of oil and gas [may be
6accumulated and remitted to the persons entitled thereto
7annually for the 12 months' accumulation of proceeds totaling
8less than $100.] shall be paid within 60 days of production.

9(a.1) Remittance.--Proceeds from production of oil and gas
10may be accumulated and remitted to the persons entitled thereto
11quarterly for the three months' accumulation of proceeds
12totaling less than $100.

13(a.2) Delinquency.--Delinquent payments under this section
14shall be paid at the legal rate of interest.

15(b) Owner to be paid.--Notwithstanding any other provision
16of this section to the contrary, all accumulated proceeds shall
17be paid to the owner thereof when production ceases or upon
18relinquishment or transfer of the payment responsibility.

19Section 3.4. Conflicts.

20If there is [any] a conflict between a division order and an
21oil and gas lease, the terms and conditions of the oil and gas
22lease shall control. A division order may not amend or
23supplement the terms and conditions of an oil and gas lease.

24Section 2. The act is amended by adding sections to read:

25Section 3.5. Joint ventures.

26In the case of a joint venture, interest owners shall be
27provided the following information related to a joint venture
28company on an annual basis <-if the joint venture company is 
29separately paying its share of the royalty:

30(1) Name of company.

1(2) Company address.

2(3) Company telephone number.

<-3(4) Each joint venture decimal interest.

<-4(4) The proportionate share of oil or natural gas that
5each joint venture markets, expressed as a decimal interest.

6Section 4. Inspection of records.

7(a) Authority.--A lessor or a person acting on behalf of a
8lessor may inspect the <-records of a lessee supporting
9documentation of a lessee for the payment information required
10under section 3.2.

11(b) Procedure.--

12(1) A lessor or a person acting on behalf of a lessor
13seeking inspection under subsection (a) must make a written
14request for inspection of records for any property for which
15the lessor has been paid royalties within the three-year
16period immediately preceding the date of the request.

17(2) Within 30 days of receipt of the request, the lessee
18shall do all of the following:

19(i) Designate a location in this Commonwealth for
20inspection which shall not impose an unreasonable travel
21burden on the lessor or the lessor's representative.

22(ii) Designate a date for inspection:

23(A) as mutually agreed; or

24(B) within 90 days of receipt of the request.

25(iii) Designate a time for inspection which is
26reasonable to permit completion of the inspection.

27(iv) Provide supporting documentation of payment
28information required under section <-3.2 for 3.2. For
29services that are provided by third parties<-. Supporting,
30supporting documentation shall consist of invoiced

1amounts for the services provided, but shall not include
2the composition of the fees charged by an unaffiliated
3third party.

4(v) Make available a knowledgeable individual who is
5able to answer questions pertaining to accounting issues
6regarding a well which is the subject of the request.

7(c) Confidentiality.--

8(1) Except as set forth in paragraph (2), information
9provided to a lessor or person acting on behalf of a lessor
10that makes a request under subsection (a):

11(i) shall be confidential; and

12(ii) may not be disclosed to any other person.

13(2) Paragraph (1) does not apply to disclosure in a
14judicial proceeding.

<-15(d) Frequency.--A request for inspection under this section
16may not be made more than once in a 12-month period.

17Section 3. This act shall take effect in 60 days.