Abandoning Mineral Rights...

 

SB 445 - Legislation which will create a period of time in determining when an owner has officially abandoned their mineral rights. Currently, landowners across the state are facing the dilemma of owning surface rights, but not owning his or her mineral rights. Furthermore, the subsurface owner of the mineral rights may not even know they are the owner. Ultimately, this abandonment is an obstacle for the current landowner who would like to use their property for the development of natural gas.

My legislation would deem mineral rights in real property abandoned after a period of 21 years of nonuse of the mineral rights by a subsurface owner. Nonuse of mineral rights is the absence of an issuance of a permit to drill a well by the Department of Environmental Protection, actual production or withdrawal of minerals from the property and the underground storage of minerals. If the subsurface landowner chooses to simply not develop the mineral rights, they could record a claim of interest with the county Recorder of Deeds within three months of the effective date of this legislation or 21 years from the nonuse, whichever is later. The 21year period is similar to current Pennsylvania abandonment law relating to adverse possession.

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Permalink Reply by Willi West on December 6, 2011 at 2:03am

While Oil & Gas is not taxable, Coal is.  My guess is that you own the coal and that is what is being taxed.

Permalink Reply by brian kulp on December 4, 2011 at 1:18pm

just file the paper work with the countyseat and your covered within 3 months. and you shold be covered.

Permalink Reply by Larry Gander on December 4, 2011 at 12:01pm

NO!

Permalink Reply by Little Cougar on December 4, 2011 at 12:18pm

No...what???  No to the SB-445 or no to which reply?

Lc

Permalink Reply by Larry Gander on December 4, 2011 at 12:23pm

NO TO SB-445     Also a note.

In WV we pay TAX on our OGM rights that we own  [if no well]

And TAX on PRODUCTION if there is a well

Permalink Reply by Little Cougar on December 4, 2011 at 12:31pm

Hmmm...I guess every state or county is different. But I agree to NO, NO, NO to SB-445...

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on December 5, 2011 at 10:52am

Tug..

The bill would still not allow someone to lease mineral rights if they are not the mineral right owner.  It only is stating that if allowed to pass...then a 3 month time frame would be acceptable to inform them that there is no interest to mine or utilize for mining/drilling....but doesn't say what else that 3 months will do.   Also the bill insinuates that 21 years has to pass before the mineral rights would revert to the property owner at the end of the 21 years, actually it doesn't say that even...just compares to another law about abandonment in reference to adverse possession.   Now if someone received ownership by mineral deed of minerals/gas/oil and many years have passed (say the mineral exclusion off a land sale contract was done in 1900 maybe even before they recorded such as deeds) and in 2011 there are many owners of that particular mineral deed(s) and perhaps it is even unknown to them.. then does the 21 years start at the onset of the first exclusion when the surface interests and the subservice interests were divided or by the most recent transfer by inheritance or sale?   See, the bill doesn't say.

I have concluded that this senate bill 445 should in no wise pass the way it is presently worded.

Permalink Reply by Michael Omerzo on December 5, 2011 at 1:36am

I feel for your situation. This bill will hurt alot more people than help. This bill is only a "Gravy Train for Attorneys"

No,No No.

Permalink Reply by owner on December 5, 2011 at 2:38am

Most of the mineral rights in western Pa were purchased by the coal companies.   Most land owneres in western pa do not own their mineral rights because the coal companies bought these rights in the late 1800's and early 1900's so that they could mine mainly the Pittsburgh coal seam.  The coal companies have been paying taxes on these rights since then, depending on how soon they might mine the coal.  Once they mine the coal, the taxes are drastically reduced.  Many school distircts in rural western pa recieve alot of their income from this tax source.   The good thing in Pa is that the mineral rights and the oil and gas are separate.  The coal companies bought the mineral rights and not the oil and gas rights.  The oil and gas rights have not been taxed because there was no way of determing a value if any for those rights whereas the coal had a determinable value and was taxed. 

 

I would think that with this bill, any current surface owner would not have to do anything to reserve any of his rights.  The bill would only affect owners of mineral rights, such as the coal companies, who do not own the surface.  

Permalink Reply by Ireland on December 5, 2011 at 5:15pm

I commented in the forum about this also. Today I received a call from Senator Yaws office about SB445.

I spoke with them for about 30 minutes and this is what the bill is all about.

The bill is to give surface or mineral rights back to the owner so they can develop as they want, but here is the catch. Its only for those whose rights were sold or leased to coal,oil or gas companies that are no longer in business. A guess there is a lot of people who can't sign leases because "ABC" Coal Company holds the lease or owns the rights and is out of business so they cant get the rights transfered back. This bill would release them from that so whoever is the rightful heir to the rights would get them(surface owner or mineral right owner).

The bill has nothing to do with someone owning the oil and gas rights and not developing them, so if you own the rights you get to keep them no matter what, they will not take them from you and give to surface owner. So all you surface owners who dont own the rights under your properties you are out of luck unless you fall under the example above.

Hope this clarifies things!!!!

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on December 5, 2011 at 6:30pm

but that is not what the bill states in detail on his web page.   Clearly needs further defined before enacting into state legislation. Unless he posted just a brief info about the bill and not the actual bill under proposal and clearly he should post the entire bill not just part for his constituients.

What I do not understand is that if ABC coal company PURCHASED the rights with a 'mineral deed' what makes the state or county authority think that the rights didn't go with the owners of ABC and even to their heirs?  Just because they might have went out of business doesn't mean they have to give up something they purchased as real property though it is subsurface.  

Now if they only LEASED those rights on a gas/oil lease and then went out of business...even many years ago....it still depends on the contract lingo as that company ABC may have 'assigned' the lease' to another company or individual.   This really needed identified as a problem to solve before any of the leases could be recorded in the courthouses..there should be a clause in every lease or purchase contract for gas/oil that states that the Lessee or new purchaser must keep on file with the county their name and address...that is why it is a good idea to put into your lease contracts that whenever the company 'assigns' the lease they must state so as to whom and where to the Lessor (landowner).

and if this bill isn't involving gas and oil (as Mark mentions something in a post earlier)...then why does the bill mention the need to be passed for development of natural gas?

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on December 6, 2011 at 2:56pm

Since we have two or three discussions going about this subject....I wanted to post this here also. 

Reserved is leased not sold or given as sold....so this bill doesn't fully identify 'LEased'... The bill should have no precedence over anyone having a bonafide 'mineral lease inc. gas/oil'.  It should only pertain to leases made that have been inactive or the lease holder cannot be found.

I heard back from the Senator's office yet it looks to me like a form letter so I am not sure if the Senator even read my comments on his website....I sent him the link to this forum discussion.

here is the email corresp. I received today.

Thank you for your email on Senate Bill 445, legislation that I have introduced earlier this year.

As you know, Senate Bill 445 would deem gas and mineral rights in real property abandoned after a period of 21 years of nonuse of the rights by a subsurface owner.  The 21 year period is similar to current Pennsylvania abandonment law relating to adverse possession.  Surface owners would then have a right to record a claim of interest in the subsurface rights with the county Recorder of Deeds.

The goal of this legislation was to streamline the process for surface owners to gain access to the subsurface rights in the event that no party lays claim to the subsurface rights.

Most recently, I have also introduced Senate Bill 1324.  This legislation, having been referred to the Senate Environmental Resources and Energy Committee, would create a statutory rebuttable presumption in favor of a surface owner if subsurface rights are not exercised after a period of 50 years.  I chose the Action to Quiet Law as a vehicle because it has extensive requirements to give notice to any potential owner in the chain of title.  Even then, if no one can be found there is a requirement to advertise in a public newspaper. Therefore, there is ample opportunity for a purported owner to come forward and protect their interest.

There appears to be wide-range support for this legislation and I am hopeful that this legislation will be considered by the Committee in the near future.

Once again, thank you for alerting me to your views with this legislation.  Please do not hesitate to contact me should you have additional questions or concerns.

---------------------------------

You see where he does not discern by what he means by 'subsurface rights'?  The terminology needs to be identified as whether he is including both mineral leases and mineral deeds (and I am speaking of gas/oil), or speaking just about the leases.   This is important as like Ireland said above in another post (on the other thread) that he received the subsurface rights by withholding them from the land sale (..he became a mineral deed owner (not a lease)....and he should not have to concern himself of ever losing his mineral deed right for it is property...or is the Senator introducing a bill that would reclaim even property held by mineral deed?  If so then he is introducing a bill that a mineral DEED owner could possibly sue the county if the county took their property away from them not complying with SB445 terms. 

But I still see the need as Tug indicated before that mineral DEED owners present themselves as to whom they are so a person can make an offer to buy them out...but is it fair to those owners who received mineral deeds that know they have these deeds but maybe do not know of the SB445 if they would lose ownership...some of the mineral deeds may be over 20 years already.  I say that the bill would be better presented more clear in definition and ruling out those mineral deed owners who are known of record.  An example:  A grandmother has held a mineral deed on 100 acres for over 50 years and dies...the heir receives the inactive mineral deed and doesn't even live in the area of the Marcellus and as soon as they discover that they now have about 100 acres of gas/oil rights to contract on a lease with the oil companies..they find that SB445 has stolen away their property because they didn't file within the three months because it has been over 50 years?   Or am I misreading this proposed legislation in SB445?

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