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Justin H. Werner of Reed Smith. Justin H. Werner of Reed Smith.

On July 29, a seven-judge panel of the Pennsylvania Commonwealth Court, on remand from the Pennsylvania Supreme Court, decided that two thirds of the rental payments and up-front bonus payments received by the commonwealth of Pennsylvania for oil and gas leases on state forest and park lands must be reserved for oil and gas conservation purposes pursuant to Article I, Section 27 of the Pennsylvania Constitution, see Pennsylvania Environmental Defense Foundation v. Commonwealth of Pennsylvania, No. 228 M.D. 2012 (June 29, 2019). The panel reasoned that the other one third of rental payments and up-front lease bonuses constituted “income” that was outside the scope of Article I, Section 27, also known as the Environmental Rights Amendment (the ERA). Absent an appeal to the Pennsylvania Supreme Court, this decision temporarily concludes the years-long dispute regarding how proceeds earned by the commonwealth of Pennsylvania from oil and gas leasing must be spent.

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