PRINTER'S NO. 74
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
91
Session of
2017
INTRODUCED BY GODSHALL, D. COSTA, MILLARD, MOUL AND PICKETT,
JANUARY 23, 2017
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
JANUARY 23, 2017
AN ACT
Amending the act of July 11, 2006 (P.L.1134, No.115), entitled
"An act providing for the creation of a trust for the benefit
of certain owners of interests in oil and gas; authorizing
the trustee to enter into leases of interests in oil and gas
under terms and conditions authorized by the court of common
pleas; providing for the administration of the trust and for
payment of moneys to the trustee; and imposing penalties for
nonpayment," further providing for purpose, for definitions
and for creation of trust for unknown owners.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 2 of the act of July 11, 2006 (P.L.1134,
No.115), known as the Dormant Oil and Gas Act, is amended to
read:
Section 2. Purpose.
The purpose of this act is to facilitate the development of
subsurface properties by reducing the problems caused by
fragmented and unknown or unlocatable ownership of oil and gas
interests and to protect the interests of unknown or unlocatable
owners of oil and gas. [It is not the purpose of this act to
vest the surface owner with title to oil and gas interests that
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have been severed from the surface estate.]
Section 2. Section 3 of the act is amended by adding
definitions to read:
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Bonus." Money or other property given for the execution of
an oil or gas lease, deed or other instrument conveying an oil
or gas interest. The term does not include rental or royalty
payments that are used to maintain an oil or gas interest.
* * *
"Correlative rights." The rights of each owner of oil and
gas interests in a common pool or source of supply of oil and
gas to have a fair and reasonable opportunity to obtain and
produce the owner's just and equitable share of the oil and gas
in the pool or source of supply, without being required to drill
unnecessary wells or incur other unnecessary expense to recover
or receive the oil or gas or its equivalent.
* * *
Section 3. Section 4 of the act is amended to read:
Section 4. Creation of trust for unknown owners.
(a) General rule.--Any person who owns an interest in oil
and gas underlying a tract of land may petition the appropriate
division of the court of common pleas of the county in which the
tract or any portion of the tract is located to declare a trust
in favor of all unknown owners of an interest in the oil and gas
underlying the tract whose identity, present residence or
present address is unknown and cannot be determined by diligent
efforts. The petitioner's interest may be in fee, by lease, a
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royalty [or], by ownership of correlative rights in an oil and
gas reservoir or by ownership of the surface tract that overlays
the oil and gas interest that is the subject of the petition.
(b) Requirements.--Before the court shall declare a trust in
favor of an unknown owner or owners, the petitioner shall show
to the satisfaction of the court that:
(1) Petitioner has made a diligent effort to locate the
owner or claimant.
(2) Despite this diligent effort, petitioner has been
unable to identify or to locate the present residence or
other address of one or more owners or claimants of the oil
or gas interest or interests in question.
(2.1) Service of process has occurred in accordance with
Pa.R.C.P. No. 410 (relating to real property actions) and
original process was served upon all surface owners whose
tracts overlay all or any part of the tract or tracts of land
that are the subject of the petition.
(3) Appointment of a trustee will be in the best
interest of all owners of interests in the oil and gas.
(4) By a preponderance of the evidence, the trust is
likely to result in the commercial development of the
subsurface properties.
(c) Appointment.--Following a determination that the
requirements of subsection (b) have been met, the court shall
appoint a financial institution authorized to do business in
this Commonwealth as trustee of a trust for the unknown owner or
owners and shall authorize the trustee to execute and deliver a
deed of sale or one or more oil or gas leases or other
instruments on terms and conditions approved by the court.
(d) Deeds of sale, leases or other instruments.--Where a
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deed of sale, lease or other instrument is authorized under
subsection (c), the trustee shall provide a credit to the sale
price for the costs incurred under subsection (b). The trustee
shall eliminate bonus payments as a factor in calculating the
fair market value of the relevant interests.
Section 4. This act shall take effect in 60 days.
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