NC S820

Reconstitutes the North Carolina Mining Commission as the Mining and Energy Commission with 15 members to oversee oil and gas exploration and development, including horizontal drilling and hydraulic fracturing.

Directs the Mining and Energy Commission and other regulatory agencies to develop a modern regulatory program for oil and gas exploration by October 1, 2014, covering well construction standards, water management, waste disposal, chemical disclosure, and environmental protections.

Authorizes horizontal drilling and hydraulic fracturing activities but prohibits issuance of permits for these activities until the General Assembly takes subsequent legislative action to allow permitting.

Establishes comprehensive landowner protections including presumptive liability for water contamination within 5,000 feet of wellheads, minimum royalty payments of 12.5%, pre-drilling water testing requirements, a 10-year maximum lease term, and a 3-day rescission right for leases.

Creates the Joint Legislative Commission on Energy Policy consisting of 10 legislators to provide oversight of energy policy and monitor the Mining and Energy Commission's development of oil and gas regulations.