senate Bill S750

2011-2012 Legislative Session

Extends the cancellation period for a gas or oil lease from 3 days to 5 days

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 04, 2012 referred to judiciary
Jan 05, 2011 referred to judiciary

S750 - Bill Details

See Assembly Version of this Bill:
A6211
Current Committee:
Law Section:
General Obligations Law
Laws Affected:
Amd ยง5-333, Gen Ob L
Versions Introduced in 2009-2010 Legislative Session:
S4683, A2370

S750 - Bill Texts

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Extends the cancellation period for a gas or oil lease from 3 days to 5 days.

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BILL NUMBER:S750

TITLE OF BILL:
An act to amend the general obligations law, in relation to extending
from 3 days to 5 days the period to cancel a lease of oil and gas
rights

PURPOSE:
To extend the cancellation period for a gas or oil lease from three
days to five days.

SUMMARY OF PROVISIONS:
Section 5-333 of General Obligations Law is amended to allow for the
extension of the cancellation period for a gas or oil lease from three
to five days.

JUSTIFICATION:
Discovery of oil and gas accumulations and advances in technology are
bringing renewed opportunity for leasing activity in New York's
Southern Tier. Landowners have an opportunity to lease or convey their
real property rights to oil and gas exploration and production.
Landowners should control this relationship through their lease
contract where the rights and duties of oil and gas exploration and
producing companies should be clearly delineated. Payment of
royalties for actual oil and gas produced, use of property for
production (i.e. roads, pipeline placement, etc.), crop and property
damages should all be defined in the lease contract.

Because of the complex and multi-faceted nature of this business
relationship between landowner and oil and gas exploration and
production company, research and consultation with an experienced
attorney is essential before entering into contract. For many
landowners, particularly rural farmers, three business days is an
insufficient amount of time to investigate this important business
transaction. Five business days, a traditional business week, is a
more adequate time frame for landowners to acquire the appropriate
legal counsel.

LEGISLATIVE HISTORY:
2009-2010: S.4683/A.2371 Reported to 3rd Calendar Reading
2008: S.7825/A.11259-A Passed Senate

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Effective thirty days after enactment into law and shall apply
to oil or gas leases entered into on or after such effective date.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   750

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  Sen.  YOUNG  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Judiciary

AN ACT to amend the general obligations law, in  relation  to  extending
  from  3  days  to  5  days the period to cancel a lease of oil and gas
  rights

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Subdivision 5 of section 5-333 of the general obligations
law, as added by chapter 386 of the laws of 2005, is amended to read  as
follows:
  5.  On  or after January first, two thousand six, any oil or gas lease
shall contain the following statement printed in at least ten point bold
type:
  THIS IS A LEASE OF OIL AND GAS RIGHTS, NOT A  SALE,  CONTAINING  TERMS
THAT  MAY  BE NEGOTIATED BY YOU. YOU HAVE THE RIGHT TO CANCEL THIS LEASE
WITHIN [THREE] FIVE BUSINESS DAYS AFTER EXECUTION OF THE LEASE BY  NOTI-
FYING  THE  LESSEE  THAT  YOU  HAVE  CANCELED THIS CONTRACT. IN ORDER TO
CANCEL THIS LEASE, YOU MUST EXECUTE A NOTICE OF CANCELLATION IN THE FORM
PROVIDED BELOW, MAIL IT TO THE LESSEE AND REFUND ALL AMOUNTS PAID TO YOU
BY THE LESSEE WITHIN THE [THREE-DAY] FIVE-DAY CANCELLATION  PERIOD.  THE
MAILING  MUST BE POSTMARKED WITHIN THE [THREE-DAY] FIVE-DAY CANCELLATION
PERIOD TO BE EFFECTIVE.
                   NOTICE OF CANCELLATION
         I/WE HEREBY CANCEL THIS LEASE.
  DATED:
  SIGNATURE(S):
  THE PERSON PRESENTING THIS LEASE TO YOU IS [ ] NOT [ ] A MEMBER OF
  (name of organization)        AND THEREFORE IS [ ] IS NOT [ ]  SUBJECT
TO  A  CODE  OF  CONDUCT.  IF THE PERSON PRESENTING THIS LEASE TO YOU IS
SUBJECT TO A CODE OF CONDUCT, A COPY OF THE  CODE  OF  CONDUCT  MUST  BE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02631-01-1

S. 750                              2

PRESENTED  TO  YOU  WITH  THIS LEASE. IF APPLICABLE, THE CODE OF CONDUCT
PROVIDES A DISPUTE RESOLUTION MECHANISM FOR ANY  DISPUTE  THAT  YOU  MAY
HAVE  REGARDING  THE MANNER BY WHICH THIS LEASE WAS PRESENTED TO YOU. IF
YOU  HAVE  ANY SUCH DISPUTE, YOU MAY INVOKE THE DISPUTE RESOLUTION MECH-
ANISM OF THE CODE OF CONDUCT BY CONTACTING THE PERSON OR PERSONS  DESIG-
NATED  IN  THE  CODE  OF  CONDUCT.  THE FAILURE OF THE LESSEE TO PAY ANY
ROYALTIES TO YOU AS REQUIRED UNDER THE TERMS OF THE LEASE FOR  A  PERIOD
OF  FOUR  CONSECUTIVE MONTHS OR MORE SHALL BE A DEFAULT UNLESS OTHERWISE
PROVIDED BY LAW, AND WILL RESULT IN CANCELLATION OF THE LEASE APPLICABLE
TO THE TARGET FORMATION OF THE WELL WITHIN THE SPACING  UNIT,  FOLLOWING
WRITTEN  NOTIFICATION  TO  THE LESSEE OF YOUR INTENT TO CANCEL AND SIXTY
DAYS FOR THE LESSEE TO CURE THE DEFAULT. IF THE LESSEE HAS A  BONA  FIDE
DISPUTE  REGARDING  THE  GROUNDS  FOR CANCELLATION, SUCH DISPUTE AND THE
REASONS THEREFOR MUST BE PROVIDED TO YOU IN WRITING OR THE DEFAULT  MUST
BE  CURED  WITHIN  SUCH  SIXTY  DAY PERIOD, OTHERWISE THE LEASE SHALL BE
CANCELLED.
  S 2. This act shall take effect on the thirtieth day  after  it  shall
have  become  a law and shall apply to oil or gas leases entered into on
or after such effective date.

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