| Gov. Manchin's bill to allow natural gas producers to charge post-production costs to WV royalty holders could be in trouble as the session begins this morning.
Phil Kabler, a reporter for the Charleston Gazette, wrote in today's edition the surprise bill would effectively overturn a $405 million royalties verdict against the state's largest natural gas companies.
But the bill appears to be in serious trouble.
Manchin's bill states that there is an implied covenant in all oil and natural gas leases that allows companies to deduct reasonable post-production costs when calculating royalties to the landowners.
The bill makes the covenant provision retroactive to apply to the companies named in $404 million Roane court verdict in favor of 10,000 royalty holders, saying the companies ripped-off the holders.
Chesapeake Energy, one of the nation's top natural gas producers, is in the eye of the storm, after threatening to not build their corporate offices and leave the state following the multi-million dollar verdict.
They have done neither.
In recent years, the large gas corporations have been deducting their expenses from the 1/8th most West Virginians have owned, with the companies already owning 7/8th's.
Most independent gas producers in WV have honored historical royalty rights.
Manchin's bill would also repeal the current severance tax exemption for coalbed methane production â provisions in a regular session bill that died on the last night of the session under intense lobbying by the coal industry.
"This is not a simple tweaking of an issue," House Judiciary Chairwoman Carrie Webster, D-Kanawha.
A public hearing is scheduled on the bill â a hearing requested by a landowners' rights group â for Tuesday morning.
Other issues scheduled for the special session:
Besides the natural gas bill, the special session agenda includes 15 bills, including some hot-button issues:
Expanding authority to issue search warrants to allow law enforcement agencies to "wire" informants in undercover drug investigations to all circuit judges and county magistrates. Under current state law, only about five circuit judges statewide have authority to issue the warrants to tape evidence in crime investigations.
Providing a personal income tax deduction for the costs of the Parkways Authority commuter cards for individuals who travel the West Virginia Turnpike.
Cracking down on the explosion in thefts of copper and other metals by expanding requirements for record-keeping and reporting that scrap dealers have to maintain on their transactions, and increasing criminal penalties for falsifying the reports.
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