HB 347 — An Act providing for the leasing of subsurface rights on State forest and park property for oil and natural gas development; establishing a restricted account within the Oil and Gas Lease Fund; making an appropriation; and abrogating an executive order and other orders and administrative policies.

PRINTER'S NO.   302

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 347
                                               Session of
                                                 2025

     INTRODUCED BY OWLETT, PICKETT, ROWE, STENDER, HAMM, OLSOMMER,
        KAUFFMAN, BANTA, GROVE, SMITH, BARGER AND ZIMMERMAN,
        JANUARY 27, 2025

     REFERRED TO COMMITTEE ON ENVIRONMENTAL AND NATURAL RESOURCE
        PROTECTION, JANUARY 27, 2025


                                    AN ACT
 1   Providing for the leasing of subsurface rights on State forest
 2      and park property for oil and natural gas development;
 3      establishing a restricted account within the Oil and Gas
 4      Lease Fund; making an appropriation; and abrogating an
 5      executive order and other orders and administrative policies.
 6      The General Assembly of the Commonwealth of Pennsylvania
 7   hereby enacts as follows:
 8   Section 1.   Short title.
 9      This act shall be known and may be cited as the Subsurface
10   Oil and Gas Lease Act.
11   Section 2.   Definitions.
12      The following words and phrases when used in this act shall
13   have the meanings given to them in this section unless the
14   context clearly indicates otherwise:
15      "Company."    An entity doing business within this Commonwealth
16   and subject to tax under Article III, IV or VI of the act of
17   March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
18   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 for oil and gas development from subsurface drilling
13   originating from well sites outside State forest or park
14   property.
15      (b)   Lease approval.--The secretary may approve or disapprove
16   a submission or nomination for a lease under this act. The
17   department shall provide in writing to a company which has sent
18   a submission or nomination to the department notice of the
19   department's decision to approve or disapprove a lease within 60
20   days of receipt from the company. The department shall list all
21   reasons for disapproval in the notification.
22      (c)   Resubmission upon disapproval.--A company receiving
23   notice of disapproval may resend a submission or nomination to
24   the department with or without changes and may include a
25   response addressing the department's reasons within 60 calendar
26   days of receipt of the department's disapproval. The department
27   shall provide in writing to a company which has sent a
28   resubmission to the department notice of the department's
29   decision to approve or disapprove a submission or nomination
30   within 60 days of receipt from the company. The department shall

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 1   list all reasons for disapproval in the notification.
 2      (d)   Reasons for disapproval.--The department may disapprove
 3   a submission or nomination for the following reasons:
 4            (1)   The company has environmental compliance violations
 5      within this Commonwealth which have not been satisfactorily
 6      addressed and which have caused a significant negative
 7      environmental impact.
 8            (2)   Development of the tract would lead to the need for
 9      related infrastructure development elsewhere on State forest
10      land which would, in the department's determination, lead to
11      significant negative environmental impacts.
12      (e)   Appeal.--A company receiving notice of disapproval of a
13   resubmission under subsection (c) may appeal the disapproval to
14   Commonwealth Court. Commonwealth Court shall consider the
15   factors in subsection (d) when considering an appeal.
16      (f)   Implementation and posting.--Within 90 days of the
17   effective date of this subsection, the department shall
18   implement the program under subsection (a) and post information
19   relating to the program and instructions regarding the manner in
20   which submissions or nominations should be sent for review on
21   the department's publicly accessible Internet website.
22      (g)   Submissions and nominations.--Companies may begin
23   sending submissions or nominations for review under this act to
24   the department 90 days after the effective date of this
25   subsection.
26      (h)   Competitive bidding process.--If the department approves
27   a submission or nomination under this act, the department shall
28   hold a competitive bidding process for the rights in question
29   under the already-approved submission or nomination as follows:
30            (1)   The department shall notify the company that

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 1      submitted the approved submission or nomination of the time
 2      and manner by which the bidding process will take place. The
 3      bidding process shall be open to any company.
 4            (2)   When the department approves a submission or
 5      nomination under this act, the department shall post
 6      information regarding the time and manner by which the
 7      bidding process will take place, along with a description of
 8      the rights which will be bid.
 9            (3)   The department shall complete the bidding process
10      and select the winning bidder within 45 days of approving a
11      submission or nomination under this act.
12            (4)   The winning bidder shall be awarded a lease for the
13      rights in question previously approved by the department.
14   Section 4.     Deposit of lease revenue and grant program.
15      (a)   Oil and Gas Lease Fund.--All revenue generated from
16   leases under this act shall be deposited into the Oil and Gas
17   Lease Fund.
18      (b)   Restricted account and continuing appropriation.--Money
19   deposited into the Oil and Gas Lease Fund under subsection (a)
20   that is attributable to upfront payments made in consideration
21   for a lease under this act shall be transferred to a restricted
22   account within the fund. The money of the restricted account is
23   appropriated on a continuing basis to the department for the
24   grant program under subsection (c).
25      (c)   Grant program.--
26            (1)   The department shall establish a grant program under
27      this act to fund stream maintenance and clearing projects.
28      The department shall prioritize awarding the money under the
29      grant program to all of the following:
30                  (i)   Projects designed to mitigate the risk of

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 1          flooding.
 2                (ii)    Projects that have the potential to preserve
 3          farmland or residential property from flooding.
 4                (iii)    Projects from areas of this Commonwealth that
 5          have been under Federal or State disaster emergency
 6          related to flooding within the last five years.
 7          (2)   The department shall award, in consultation with
 8      county conservation districts, the money under the grant
 9      program to projects in different areas of this Commonwealth.
10      A proposed project within a single county or municipality
11      shall not receive more than 10% of the money under the grant
12      program distributed by the department in a given year.
13   Section 5.   Construction.
14      Nothing in this act shall be construed to prohibit oil and
15   gas drilling on State forest and park property in accordance
16   with the laws of this Commonwealth.
17   Section 6.   Abrogation of executive order and other orders and
18                administrative policies.
19      This act shall abrogate Executive Order 2015-03 and any other
20   order or administrative policy in conflict with this act.
21   Section 7.   Effective date.
22      This act shall take effect immediately.




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