An amendment to a controversial oil and natural gas bill would’ve given money to the Public Employees Insurance Agency, but was rejected on a voice vote Friday afternoon.
Sen. Richard Ojeda, D-Logan, who’s been vocal about the need to increase teacher pay and benefits before and during the ongoing teacher strike, proposed an amendment to House Bill 4268, the so-called “co-tenancy bill” that would take 2.5 percent of the gross value of gas or oil produced on drilled land and give it to PEIA — “basically similar to a severance tax,” Ojeda said Friday afternoon.
The co-tenancy bill would allow natural gas and oil companies to drill with the majority, or 75 percent, of the land owners’ consent. An amendment passed on the House floor says 50 percent of unknown owners’ interests on the minerals drilled would go toward a PEIA Stability Fund, instead of entirely to the Oil and Gas Reclamation Fund.
The money will be kept in the Unknown and Unlocatable Interest Owners Fund before it’s transferred.
Funding for PEIA has been hotly debated within the legislature, and it’s been a cornerstone of the teacher strike at the capitol.
But Sen. Charles Trump, R-Morgan, and chair of the Senate judiciary committee, was quick to oppose Ojeda’s amendment Friday. The severance tax in West Virginia is already higher than surrounding states, he said.
“All that will do is kill this bill with a poison bill,” said Sen. Michael Maroney, R-Marshall. “This bill, co-tenancy, is important not for the gas companies, it’s important to the citizens, and the citizens are in my district.”
That amendment, along with two others proposed by Sen. Michael Romano, D-Harrison, were rejected Friday. One amendment would have added a Pugh clause — a similar proposal he brought up in the Senate’s judiciary committee this week that was rejected. Friday, the amendment was rejected 18-14.
The other would have given due process to unwilling minority owners by allowing them to contest their compensation in court.
Sen. Randy Smith, R-Tucker, criticized the amendment, saying it disrupted the balance of the bill — a point he made in the Judiciary Committee this week.
“It’s time we quit kicking this can down the road,” he said. “Let’s put it in the trash and be done with it.”
But some county chapters of the West Virginia Farm Bureau aren’t on board, even though the state Farm Bureau is, Romano said in response to Smith.
“The people who negotiate that don’t represent the people. The stakeholders in there negotiating, representing groups, they’re paid lobbyists ... We represent the people, we’re their lobbyists,” Romano said.
The amendment was rejected with a 22-10 vote.
Earlier Friday, the House passed another bill advocates say would protect mineral owners.
Senate Bill 360 proposes that post-production expenses, such as transportation or severance taxes, not be taken out of royalty owners’ checks. It maintains a 1980s law that oil and gas leases pay one-eighth royalty to leaseholders on new drilling permits.
The Supreme Court upheld that standard in 2016 after hearing a case Leggett v. EQT Production, but reheard the case after Justice Beth Walker replaced Justice Brent Benjamin and decided that natural gas drillers could, in fact, deduct post-production costs from royalties owed to mineral owners.
The goal of SB 360, advocates said, was to reverse the so-called “Leggett decision” and keep more money in the pockets of mineral owners. The bill passed the House Friday with a 96-2 vote.
The bill entitles West Virginians to their “fair share” of profits from oil and natural gas, said Tom Huber, president of the West Virginia Royalty Owner’s Association. Seeing the co-tenancy bill advance and royalty bill pass Friday was a win for mineral owners, Huber said. The bill now heads to the governor’s desk.