PRIOR PRINTER'S NO. 2883 PRINTER'S NO. 2907
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 2461
Session of
2022
INTRODUCED BY OWLETT, CAUSER, PICKETT, RYAN, HENNESSEY, O'NEAL,
ROTHMAN, BERNSTINE, SMITH, KAUFFMAN, OBERLANDER, JAMES,
M. MACKENZIE, COX, HAMM, COOK, SAYLOR, STRUZZI, GROVE, MOUL,
HERSHEY, ROWE AND DAVANZO, MARCH 25, 2022
AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
MARCH 30, 2022
AN ACT
1 Providing for the leasing of subsurface rights on State forest
2 and park property for oil and natural gas development; MAKING <--
3 AN APPROPRIATION; and abrogating an executive order and other
4 orders and administrative policies.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Short title.
8 This act shall be known and may be cited as the Subsurface
9 Oil and Gas Lease Act.
10 Section 2. Definitions.
11 The following words and phrases when used in this act shall
12 have the meanings given to them in this section unless the
13 context clearly indicates otherwise:
14 "Company." An entity doing business within this Commonwealth
15 and subject to tax under Article III, IV or VI of the act of
16 March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
17 1971.
 1 "Department." The Department of Conservation and Natural
2 Resources of the Commonwealth.
3 "Secretary." The Secretary of Conservation and Natural
4 Resources of the Commonwealth.
5 "UPFRONT PAYMENTS." ALL PAYMENTS RECEIVED BY THE <--
6 COMMONWEALTH WHICH ARE PAID AT THE TIME THAT A LEASE IS ENTERED
7 INTO UNDER THIS ACT.
8 Section 3. Subsurface drilling under Commonwealth lands.
9 (a) Program established.--The department shall establish a
10 program to review submissions or nominations by companies for
11 the leasing of subsurface rights under State forest and park
12 property by companies for oil and gas development from
13 subsurface drilling originating from well sites outside the
14 State forest or park property.
15 (b) Lease approval.--The secretary shall have the authority
16 to approve or disapprove any submission or nomination for a
17 lease under this act. The department shall provide in writing to
18 a company which has sent a submission or nomination to the
19 department notice of the department's decision to grant APPROVE <--
20 or not grant APPROVE a lease within 60 days of receipt from the <--
21 company. If the department is disapproving the grant of a lease, <--
22 the department shall list all reasons why the department has
23 made the decision in the notification.
24 (c) Resubmission upon disapproval.--A company receiving
25 notice of disapproval may resend a submission or nomination to
26 the department with or without changes and may include a
27 response addressing the department's reasons within 60 calendar
28 days of receipt of the department's disapproval. The department
29 shall provide in writing to a company which has sent a
30 resubmission to the department notice of the department's
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 1 decision to grant or not grant a lease APPROVE OR NOT APPROVE A <--
2 SUBMISSION OR NOMINATION within 60 days of receipt from the
3 company. If the department is disapproving the grant of a lease, <--
4 the department shall list all reasons why the department has
5 made the decision in the notification.
6 (d) Reasons for disapproval.--The department may disapprove
7 a submission or nomination for the following reasons:
8 (1) The company has environmental compliance violations
9 within this Commonwealth which have not been satisfactorily
10 addressed and which have caused a significant negative
11 environmental impact.
12 (2) Development of the tract would lead to the need for
13 related infrastructure development elsewhere on State forest
14 land which would, in the department's determination, lead to
15 significant negative environmental impacts.
16 (e) Appeal.--A company receiving notice of a disapproval of
17 a resubmission under subsection (c) may appeal the disapproval
18 to Commonwealth Court. Commonwealth Court shall consider the
19 factors in subsection (d) when considering an appeal.
20 (f) Implementation and posting.--Within 90 days of the
21 effective date of this section, the department shall implement
22 the program under subsection (a) and post information relating
23 to the program and instructions regarding the manner in which
24 submissions or nominations should be sent for review on its
25 publicly accessible Internet website.
26 (g) Submissions and nominations.--Companies may begin
27 sending submissions or nominations for review under this act to
28 the department 90 days after the effective date of this section.
29 Section 4. Funds. <--
30 All revenue generated from leases and royalties under this
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 1 act shall be deposited into the Oil and Gas Lease Fund.
2 (H) COMPETITIVE BIDDING PROCESS.--IF THE DEPARTMENT APPROVES <--
3 A SUBMISSION OR NOMINATION UNDER THIS ACT, THE DEPARTMENT SHALL
4 HOLD A COMPETITIVE BIDDING PROCESS FOR THE RIGHTS IN QUESTION
5 UNDER THE ALREADY APPROVED SUBMISSION OR NOMINATION. THE
6 FOLLOWING SHALL APPLY:
7 (1) THE DEPARTMENT SHALL NOTIFY THE COMPANY THAT
8 SUBMITTED THE APPROVED SUBMISSION OR NOMINATION OF THE TIME
9 AND MANNER BY WHICH THE BIDDING PROCESS WILL TAKE PLACE AND
10 THE BIDDING PROCESS SHALL BE OPEN TO ANY COMPANY.
11 (2) WHEN THE DEPARTMENT APPROVES A SUBMISSION OR
12 NOMINATION UNDER THIS ACT, THE DEPARTMENT SHALL POST
13 INFORMATION REGARDING THE TIME AND MANNER BY WHICH THE
14 BIDDING PROCESS WILL TAKE PLACE, ALONG WITH A DESCRIPTION OF
15 THE RIGHTS WHICH WILL BE BID.
16 (3) THE DEPARTMENT SHALL COMPLETE THE BIDDING PROCESS
17 AND SELECT THE WINNING BIDDER WITHIN 45 DAYS OF APPROVING A
18 SUBMISSION OR NOMINATION UNDER THIS ACT.
19 (4) THE WINNING BIDDER SHALL BE AWARDED A LEASE FOR THE
20 RIGHTS IN QUESTION PREVIOUSLY APPROVED BY THE DEPARTMENT.
21 SECTION 4. USE OF FUND AND GRANT PROGRAM.
22 (A) INITIAL DEPOSITS.--ALL REVENUE GENERATED FROM LEASES
23 UNDER THIS ACT SHALL BE DEPOSITED INTO THE OIL AND GAS LEASE
24 FUND.
25 (B) APPROPRIATION.--MONEY DEPOSITED INTO THE OIL AND GAS
26 LEASE FUND UNDER SUBSECTION (A) WHICH IS ATTRIBUTABLE TO UPFRONT
27 PAYMENTS MADE IN CONSIDERATION FOR A LEASE UNDER THIS ACT IS
28 HEREBY APPROPRIATED ON A CONTINUING BASIS TO THE DEPARTMENT FOR
29 THE GRANT PROGRAM UNDER SUBSECTION (C). THE APPROPRIATION UNDER
30 THIS SUBSECTION SHALL NOT LAPSE.
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 1 (C) GRANT PROGRAM.--
2 (1) THE DEPARTMENT SHALL ESTABLISH A GRANT PROGRAM UNDER
3 THIS ACT TO FUND STREAM MAINTENANCE AND CLEARING PROJECTS.
4 THE DEPARTMENT SHALL PRIORITIZE AWARDING THE MONEY UNDER THE
5 GRANT PROGRAM TO ALL OF THE FOLLOWING:
6 (I) PROJECTS DESIGNED TO MITIGATE THE RISK OF
7 FLOODING.
8 (II) PROJECTS THAT HAVE THE POTENTIAL TO PRESERVE
9 FARMLAND OR RESIDENTIAL PROPERTY FROM FLOODING.
10 (III) PROJECTS FROM AREAS OF THIS COMMONWEALTH THAT
11 HAVE BEEN UNDER FEDERAL OR STATE DISASTER EMERGENCY
12 RELATED TO FLOODING WITHIN THE LAST FIVE YEARS.
13 (2) THE DEPARTMENT SHALL AWARD THE MONEY UNDER THE GRANT
14 PROGRAM TO PROJECTS IN DIFFERENT AREAS OF THIS COMMONWEALTH.
15 A PROPOSED PROJECT WITHIN A SINGLE COUNTY OR MUNICIPALITY
16 SHALL NOT RECEIVE MORE THAN 10% OF THE MONEY UNDER THE GRANT
17 PROGRAM DISTRIBUTED BY THE DEPARTMENT IN A GIVEN YEAR.
18 Section 5. Construction.
19 Nothing in this act shall be construed to prohibit oil and
20 gas drilling on State forest and park property in accordance
21 with the laws of this Commonwealth.
22 Section 6. Abrogation of executive order and other orders and
23 administrative policies.
24 This act shall abrogate Executive Order 2015-03 and any other
25 order or administrative policy in conflict with this act.
26 Section 7. Effective date.
27 This act shall take effect immediately.
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