A BILL TO BE ENTITLED
AN ACT to provide that contracts to lease or convey the fee simple title to oil, gas, or mineral rights separate from the surface fee simple ownership are against public policy, void, and unenforceable.
The General Assembly of North Carolina enacts:
SECTION 1.  Chapter 22B of the General Statutes is amended by adding a new Article to read:
"Article 4.
"Contracts to Lease or Convey Fee Simple Title to Oil, Gas, or Mineral Rights Separate From the Surface Fee Simple Ownership for the Purpose of Natural Gas Exploration.
The General Assembly finds that natural gas exploration and extraction using hydraulic fracturing represents a threat to health and public safety. Therefore, any contract or lease agreement purporting to convey oil, gas, or mineral rights for the purpose of natural gas extraction using hydraulic fracturing is void and unenforceable. For purposes of this Article, "hydraulic fracturing" means the stimulation of a well by the application of hydraulic fracturing fluids and additives with force in order to create artificial fractures in the formation for the purpose of improving the capacity to produce hydrocarbons."
SECTION 2.  There is appropriated to the Department of Justice the sum of twenty‑five thousand dollars ($25,000) to conduct or contract for a study of the extent and nature of existing contracts of the type declared void and unenforceable by this act.
SECTION 3.  This act becomes effective October 1, 2012, and applies to contracts or lease agreements recorded on or after that date.  This act expires on October 1, 2015.