Signed by Governor Tom Corbett

Vote Smart's Synopsis:

Vote to adopt a conference report that authorizes counties to establish oil and natural gas impact fees.

Highlights:

• Authorizes counties to impose an impact fee on new unconventional gas wells (Sec. 1).

• Defines “unconventional gas well” as an oil or gas well that drills below a geologic shale formation where gas and oil cannot be extracted economically without either (Sec. 1):
• Hydraulic fracturing of vertical or horizontal well bores; or
• Exposing bore formation using multilateral well bores or other techniques.

• Specifies that the impact fee for each unconventional gas well shall be determined as follows (Sec. 1):
• In year 1:
• $40,000 if the average price of natural gas is no more than $2.25;
• $45,000 if the average price of natural gas is between $2.25 and $3;
• $50,000 if the average price of natural gas is between $3 and $5;
• $55,000 if the average price of natural gas is between $4 and $6; and
• $60,000 if the average price of natural gas is more than $6.
• In year 2:
• $30,000 if the average price of natural gas is no more than $2.25;
• $35,000 if the average price of natural gas is between $2.25 and $3;
• $40,000 if the average price of natural gas is between $3 and $5;
• $45,000 if the average price of natural gas is between $4 and $6; and
• $55,000 if the average price of natural gas is more than $6.
• In year 3:
• $25,000 if the average price of natural gas is no more than $2.25;
• $30,000 if the average price of natural gas is between $2.25 and $3;
• $30,000 if the average price of natural gas is between $3 and $5;
• $40,000 if the average price of natural gas is between $4 and $6; and
• $50,000 if the average price of natural gas is more than $6.
• In years 4-10:
• $10,000 if the average price of natural gas is no more than $2.25;
• $15,000 if the average price of natural gas is between $2.25 and $3; and
• $20,000 if the average price of natural gas is greater than $3.
• In years 11-15:
• $5,000 if the average price of natural gas is no more than $3; and
• $10,000 if the average price of natural gas is more than $3.

• Exempts the following unconventional gas wells from the impact fee (Sec. 1):
• Nonproducing unconventional gas well; or
• Wells incapable of producing more than 90,000 cubic feet of gas per day.

• Requires unconventional wells to be drilled at least (Sec. 1):
• 300 feet from a wetland;
• 500 feet from a building or water well; and
• 1000 feet from water well, surface water intake, reservoir or other water supply used by a public water system if the consent of the operator was not obtained.

• Requires that well operators restore or replace an adequate quantity and quality of water if the well operator pollutes or diminishes a supply of public or private water (Sec. 1).

• Requires that the Department of Environmental Protection of Pennsylvania to publish on its website a list of confirmed cases of water supply contamination by hydraulic fracturing (Sec. 1). 

• Requires that well operators keep records for at least 5 years containing the location and method of wastewater disposal from hydraulic fracturing (Sec. 1).

• Appropriates funds collected from the unconventional gas well fee for various purposes including, but not limited to, the following (Sec. 1):
• County Conservation Districts; and
• The Department of Environmental Protection of the state of Pennsylvania.

Full Bill Text

Vote Smart's Synopsis:

Vote to adopt a conference report that authorizes counties to establish oil and natural gas impact fees.

Highlights:

• Authorizes counties to impose an impact fee on new unconventional gas wells (Sec. 1).

• Defines “unconventional gas well” as an oil or gas well that drills below a geologic shale formation where gas and oil cannot be extracted economically without either (Sec. 1):
• Hydraulic fracturing of vertical or horizontal well bores; or
• Exposing bore formation using multilateral well bores or other techniques.

• Specifies that the impact fee for each unconventional gas well shall be determined as follows (Sec. 1):
• In year 1:
• $40,000 if the average price of natural gas is no more than $2.25;
• $45,000 if the average price of natural gas is between $2.25 and $3;
• $50,000 if the average price of natural gas is between $3 and $5;
• $55,000 if the average price of natural gas is between $4 and $6; and
• $60,000 if the average price of natural gas is more than $6.
• In year 2:
• $30,000 if the average price of natural gas is no more than $2.25;
• $35,000 if the average price of natural gas is between $2.25 and $3;
• $40,000 if the average price of natural gas is between $3 and $5;
• $45,000 if the average price of natural gas is between $4 and $6; and
• $55,000 if the average price of natural gas is more than $6.
• In year 3:
• $25,000 if the average price of natural gas is no more than $2.25;
• $30,000 if the average price of natural gas is between $2.25 and $3;
• $30,000 if the average price of natural gas is between $3 and $5;
• $40,000 if the average price of natural gas is between $4 and $6; and
• $50,000 if the average price of natural gas is more than $6.
• In years 4-10:
• $10,000 if the average price of natural gas is no more than $2.25;
• $15,000 if the average price of natural gas is between $2.25 and $3; and
• $20,000 if the average price of natural gas is greater than $3.
• In years 11-15:
• $5,000 if the average price of natural gas is no more than $3; and
• $10,000 if the average price of natural gas is more than $3.

• Exempts the following unconventional gas wells from the impact fee (Sec. 1):
• Nonproducing unconventional gas well; or
• Wells incapable of producing more than 90,000 cubic feet of gas per day.

• Requires unconventional wells to be drilled at least (Sec. 1):
• 300 feet from a wetland;
• 500 feet from a building or water well; and
• 1000 feet from water well, surface water intake, reservoir or other water supply used by a public water system if the consent of the operator was not obtained.

• Requires that well operators restore or replace an adequate quantity and quality of water if the well operator pollutes or diminishes a supply of public or private water (Sec. 1).

• Requires that the Department of Environmental Protection of Pennsylvania to publish on its website a list of confirmed cases of water supply contamination by hydraulic fracturing (Sec. 1). 

• Requires that well operators keep records for at least 5 years containing the location and method of wastewater disposal from hydraulic fracturing (Sec. 1).

• Appropriates funds collected from the unconventional gas well fee for various purposes including, but not limited to, the following (Sec. 1):
• County Conservation Districts; and
• The Department of Environmental Protection of the state of Pennsylvania.

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that permits counties to implement an oil or natural gas well impact fee and authorizes the state to transfer funds from the Oil and Gas Lease Fund.

Highlights:

• Authorizes a county to enact an unconventional gas well impact fee on new and existing wells in the county unless (Sec. 1): 
• The well is nonproducing; or
• The natural gas or oil produced is used directly at the well site.

• Authorizes an impact fee on unconventional gas wells to be implemented as follows (Sec. 1):
• For a vertical unconventional gas well:
• $10,000 or less for year 1;
• $7,500 or less for year 2;
• $5,000 or less for year 3; and
• $2,500 or less for years 4 through 10;
• For other types of unconventional gas wells:
• $40,000 or less for year 1;
• $30,000 or less for year 2;
• $20,000 or less for year 3; and
• $10,000 or less for years 4 through 10.

• Appropriates 75 percent of the unconventional gas well impact fee to the counties and municipalities where the producing unconventional gas wells are located and 25 percent to state departments and offices (Sec. 1).

• Defines “unconventional gas well” as an oil or gas well that drills below a geologic shale formation where gas and oil cannot be produced economically without either (Sec. 1):
• Hydraulic fracturing of vertical or horizontal well bores; or
• Exposing bore formation using multilateral well bores or other techniques. 

• Appropriates funds for Interfund Transfers as follows (Sec. 1):
• On July 1, 2013 and each July 1 thereafter:
• An amount equal to 25 percent of the revenue in The Oil and Gas Lease Fund from the previous year will be transferred to the Environmental Stewardship Fund for plugging abandoned oil and gas wells;
• An amount equal to 5 percent of the revenue in The Oil and Gas Lease Fund from the previous year; not to exceed $4 million, will be transferred to counties, school districts, and townships; and
• $15 million will be transferred to the Conservation District Fund; 
• On July 1, 2014:
• $40 million will be transferred to the Hazardous Waste Cleanup Fund; 
• On July 1, 2015 and each July 1 thereafter:
• An amount equal to the percent change in the Consumer Price Index for Urban Consumers from the previous year multiplied by the amount transferred on July 1, 2014 will be transferred to the Hazardous Waste Cleanup Fund. 

• Authorizes the transfer of funds to programs with the purpose of reducing public transportation emissions by using natural gas as fuel (Sec. 1).

• Appropriates funds from the Oil and Gas Lease Fund as follows (Sec. 1):
• $5 million to the Keystone Project; and
• $7.5 million to the Clean Transit Project. 

• Requires all gas and oil wells to obtain a permit that shall take into account the impact of a well on public resources, including, but not limited to (Sec. 2):
• Publicly owned parks, forests, game lands and wildlife areas;
• National or state scenic rivers;
• National natural landmarks;
• Habitats of rare and endangered flora and fauna and other critical communities; and
• Historical and archaeological sites listed on the federal or state list of historic places.

• Prohibits permits for gas and oil wells within certain distances of existing water wells, surface water intakes, or reservoirs (Sec. 2).

Full Bill Text