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PRINTER'S NO. 1762
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1401
Session of
2017
INTRODUCED BY DiGIROLAMO, DeLISSIO, MURT, READSHAW, DEAN,
STURLA, O'BRIEN, KINSEY, FREEMAN, McNEILL, CHARLTON, DAVIS,
D. COSTA, V. BROWN, DONATUCCI, PASHINSKI AND SOLOMON,
MAY 18, 2017
REFERRED TO COMMITTEE ON FINANCE, MAY 18, 2017
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," providing for natural gas drilling tax
investment.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding an article to
read:
ARTICLE XI-E
NATURAL GAS DRILLING TAX INVESTMENT
PART I
NATURAL GAS DRILLING TAX
Section 1101-E. Definitions.
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The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Account." The Natural Gas Drilling Tax Restricted Account
established under section 1129-E(b).
"Association." A partnership, limited partnership or any
other form of unincorporated enterprise owned or conducted by
two or more persons.
"Barrel." Forty-two United States gallons at an atmospheric
pressure of 231 cubic inches of liquid at a standard temperature
of 60 degrees Fahrenheit.
"Coal bed methane." Gas which is produced from coal beds,
coal seams, mined-out areas or gob wells.
"Corporation." A corporation, joint stock association,
limited liability company, business trust or any other
incorporated enterprise organized under the laws of the United
States, this Commonwealth or any other state, territory or
foreign country or dependency.
"Department." The Department of Revenue of the Commonwealth.
"Dry natural gas." Hydrocarbon gases, consisting mostly of
methane, that remain after the natural gas liquid portion of the
natural gas stream has been removed and any volume of
nonhydrocarbon gases have been removed in sufficient quantity to
render the gas marketable. The term includes consumer-grade
natural gas or pipeline-quality natural gas.
"Gross proceeds." The value, whether in money or other
property, actually proceeding from the sale of property, without
a deduction for the cost of property sold or expenses of any
kind.
"Gross value." The gross proceeds received or receivable for
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property transferred, except as follows:
(1) In a transaction involving related parties, gross
proceeds of the property transferred may not be less than the
fair market value of similar grade and quality property.
(2) In the absence of a sale, gross proceeds of the
property transferred may not be less than the fair market
value of similar grade and quality property.
(3) In a transaction where property is transferred for
the purpose of processing and resale, gross proceeds of the
property transferred may not be less than the fair market
value of similar grade and quality property.
"Meter." A device to measure the passage of volumes of gases
or liquids past a certain point.
"Natural gas." A fossil fuel consisting of a mixture of
hydrocarbon gases, including methane, ethane, propane, butane,
carbon dioxide, oxygen, nitrogen and hydrogen sulfide and other
gas species. The term includes natural gas from oil fields known
as associated gas or casing head gas, natural gas fields known
as nonassociated gas, coal beds, shale beds and other
formations. The term does not include coal bed methane.
"Natural gas liquids." Hydrocarbons, including ethane,
propane, butane, isobutane and pentane, that are separated from
natural gas as liquids through the process of absorption,
condensation, adsorption, cooling in gas separators or gas
processing of cycling plants.
"Person." Includes a corporation, partnership, limited
liability company, business trust, other association, a
government entity other than the Commonwealth, estate, trust,
foundation or natural person.
"Producer." A person who engages or continues within this
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Commonwealth in the business of severing natural gas from
unconventional formations for sale, profit or commercial use.
"Producing site." A point of severance, including a well and
its associated zones and multilateral well bores, that is
capable of producing natural gas from an unconventional
formation.
"Related parties." Two or more people, organizations or
businesses owned or controlled directly or indirectly by the
same interests. Control exists if a contract or lease, either
written or oral, is entered into where one party severs or
processes natural gas owned or held by another party and the
owner or lessor participates in the severing, processing or
marketing of the natural gas or receives any value other than an
arm's-length passive royalty interest.
"Reporting period." A calendar month in which natural gas is
severed.
"Sales meter." A meter at the point where natural gas is
sold or transported to a purchaser or the market.
"Sever." The extraction or other removal of natural gas from
an unconventional formation in this Commonwealth.
"Storage field." A natural formation or other site that is
used to store natural gas that did not originate from and has
been transplanted into the formation or site.
"Stripper well." A producing site that produced an average
of less than 50 units of natural gas per day during the calendar
year immediately preceding a reporting period.
"Tax." The tax imposed under this article.
"Taxpayer." A person subject to the tax imposed by this
article.
"Unconventional formation." A geological shale formation
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existing below the base of the Elk Sandstone or its geologic
equivalent stratigraphic interval where natural gas generally
cannot be produced at economic flow rates or in economic volumes
except by vertical or horizontal well bores stimulated by
hydraulic fracture treatments or using multilateral well bores
or other techniques to expose more of the formation to the well
bore.
"Unit." A thousand cubic feet (Mcf) of natural gas at a
temperature of 60 degrees Fahrenheit and an absolute pressure of
14.73 pounds per square inch, in accordance with American Gas
Association (AGA) standards and according to Boyle's law for the
measurement of gas under varying pressures with deviations
therefrom as follows:
(1) The average absolute atmospheric pressure shall be
assumed to be 14.4 pounds to the square inch, regardless of
actual elevation or location of point of delivery above sea
level or variations in such atmospheric pressure from time to
time.
(2) The temperature of the gas passing the meters shall
be determined by the continuous use of a recording
thermometer installed so that the thermometer may properly
record the temperature of the gas flowing through the meters.
The arithmetic average of the temperature recorded each 24-
hour day shall be used in computing gas volumes. If a
recording thermometer is not installed, or if installed and
not operating properly, an average flowing temperature of 60
degrees Fahrenheit shall be used in computing gas volume.
(3) The specific gravity of the gas shall be determined
by tests made by the use of an Edwards or Acme gravity
balance, annually, or at intervals as are found necessary in
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practice. Specific gravity shall be used in computing gas
volumes.
(4) The deviation of the natural gas from Boyle's law
shall be determined by tests annually or at other shorter
intervals as are found necessary in practice. The apparatus
and the method to be used in making the tests shall be in
accordance with recommendations of the National Institute of
Standards and Technology of the Department of Commerce, or
Report No. 3 of the Gas Measurement Committee of the American
Gas Association, or any amendments thereof. The results of
the tests shall be used in computing the volume of gas
delivered.
"Wellhead meter." A meter placed at a producing site to
measure the actual volume of natural gas severed.
Section 1102-E. Imposition of tax.
(a) Imposition.--There is hereby levied a privilege tax on
every producer.
(b) Rate.--The tax imposed under subsection (a) shall be the
following:
(1) Three and two-tenths percent of the gross value of
the dry natural gas derived from the natural gas severed as
shown by the gross proceeds derived from the sale by the
producer.
(2) Three and two-tenths percent of the gross value of
the natural gas liquids derived from the natural gas severed
as shown by the gross proceeds derived from the sale by the
producer.
(c) Exemptions.--The tax imposed under subsection (a) shall
not be imposed upon the following:
(1) Natural gas, dry natural gas or natural gas liquids
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severed under a natural gas lease and provided to a lessor
for no consideration for the lessor's own use.
(2) Natural gas, dry natural gas or natural gas liquids
severed from a stripper well.
(3) Natural gas, dry natural gas or natural gas liquids
severed from a storage field.
Section 1103-E. Calculation and publication of average market
price.
The department shall calculate the average market price per
unit of natural gas for each calendar quarter. The average
market price shall be the weighted average price per unit for
all major Commonwealth distribution hubs on the interstate
natural gas pipeline system for the three months prior to the
calendar quarter. The department shall publish a notice of the
average market price for each calendar quarter in the
Pennsylvania Bulletin not later than 30 days of the beginning of
each calendar quarter.
Section 1104-E. Prohibition.
A producer may not make the tax imposed under section 1102-E
on natural gas severed under a natural gas lease, an obligation,
indebtedness or liability of a landowner, leaseholder or other
person in possession of real property upon which the removal or
extraction occurs and shall not otherwise require the landowner
to pay or reimburse the producer for the amount of the tax.
Section 1104.1-E. Existing agreements.
A provision of an agreement, which is in existence prior to
the effective date of this section, which violates section 1104-
E is declared to be illegal, contrary to public policy and null
and void.
Section 1104.2-E. Future agreements.
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On or after the effective date of this section, a provision
of an agreement in violation of section 1104-E is declared to be
illegal, contrary to public policy and null and void.
Section 1105-E. Return and payment.
(a) Return.--Each producer is required to file a return with
the department, on a form to be prescribed by the department,
reporting all severed natural gas per reporting period and the
tax due as imposed under section 1102-E.
(b) Filing.--The return required by subsection (a) must be
filed with the department on or before the 20th day of the
fourth calendar month after a reporting period.
(c) Due date.--The tax imposed under section 1102-E is due
on the day the return is required to be filed and becomes
delinquent if not remitted to the department by that date.
Section 1106-E. Natural gas severance tax licensing.
(a) License required.--Each producer subject to tax under
this part must apply to the department for a severance tax
license before severing natural gas from this Commonwealth.
Producers who have been severing natural gas from this
Commonwealth prior to the effective date of this part must
obtain a license from the department within six months from the
effective date of this part. All other producers must obtain a
license before severing natural gas from this Commonwealth. A
producer is liable for the tax imposed by this article without
regard to whether the producer obtains or is required to obtain
a license.
(b) Fee.--The department may charge an application fee to
cover the administrative costs associated with the application
and licensing process. If the department charges an application
fee, the department may not issue a license until the producer
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has paid the application fee.
(c) Declaration.--As part of the application for a license,
the producer shall provide a declaration of all sites in this
Commonwealth used by the producer for the severance of natural
gas. The declaration shall include all producing sites and sites
which are stripper wells. The producer shall update the
declaration when the producer adds or removes a producing site
in this Commonwealth or when there is a change in the status of
a producing site. The producer shall update the declaration
within 30 days after a calendar month in which a change to the
declaration occurs.
(d) Department duties.--The department shall, after the
receipt of an application, issue the license applied for under
subsection (a), if the applicant filed all required State tax
reports and paid any State taxes not subject to a timely
perfected administrative or judicial appeal or subject to a duly
authorized deferred payment plan. The license shall be
nonassignable. Each producer shall be required to renew the
license on a staggered renewal system established by the
department. After the initial staggered period, a license issued
shall be valid for a period of five years.
(e) State taxes.--If an applicant for a license or a person
holding a license has not filed all required State tax reports
and paid any State taxes not subject to a timely perfected
administrative or judicial appeal or subject to a duly
authorized deferred payment plan, the department may refuse to
issue, suspend or revoke the license. The department shall
notify the applicant or registrant of a refusal, suspension or
revocation. The notice shall contain a statement that the
refusal, suspension or revocation may be made public. The notice
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shall be made by first class mail. An applicant or licensee
aggrieved by the determination of the department may file an
appeal of the determination in the same manner as provided for
reassessments of tax under section 1108-E. In the case of a
suspension or revocation which is appealed, the license shall
remain valid pending a final outcome of the appeal.
Notwithstanding any other provision of law to the contrary, if
no appeal is taken or if an appeal is taken and denied at the
conclusion of the appeal process, the department may disclose,
by publication or otherwise, the identity of a person and
evidence that the person's license has been refused, suspended
or revoked under this subsection. Disclosure may include the
basis for refusal, suspension or revocation.
(f) Severing without a license.--A person that severs
natural gas in this Commonwealth without holding a valid license
under this section shall be guilty of a summary offense and,
upon conviction thereof, be sentenced to pay a fine of not less
than $300 nor more than $1,500 and, in default thereof, to
undergo imprisonment of not less than five days nor more than 30
days. The penalties imposed by this subsection shall be in
addition to any other penalties imposed by law. For purposes of
this subsection, the severing of natural gas during any calendar
day shall constitute a separate violation. The Secretary of
Revenue may designate employees of the department to enforce the
provisions of this subsection. The employees shall exhibit proof
of and be within the scope of the designation when instituting
proceedings as provided by the Pennsylvania Rules of Criminal
Procedure.
(g) Liability.--Failure to obtain a license does not relieve
a person from liability for the tax imposed by this part.
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(h) Civil penalty.--In addition to any tax, interest or
other penalty due under this article, the department shall
impose a civil penalty of 10 ¢ per unit severed during the period
a producer is required to and does not have a license. The
penalty shall be assessed and collected under this part.
Section 1107-E. Meters.
A producer shall provide for and maintain discrete wellhead
and sales meters. A producer shall ensure that all meters are
maintained according to industry standards.
Section 1108-E. Administration of tax.
Unless otherwise noted to the contrary, Chapters IV, V, VI,
VII and VIII of Part VI of Article II shall apply to this
article.
Section 1109-E. Records.
A producer shall maintain the following records:
(1) Wellhead and sales meter charts for each reporting
period and the meter calibration and maintenance records. If
turbine meters are in use, the maintenance records will be
made available to the department upon request.
(2) All records, statements and other instruments
furnished to a producer by a person to whom the producer
delivers for sale, transport or other delivery of any natural
gas.
(3) Records, statements and other instruments as the
department may prescribe by regulation.
Section 1110-E. Enforcement of article.
The department and the Department of Environmental Protection
shall have the ability to inspect records and locations to
ensure compliance with this article.
PART II
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IMPACT FEE
Section 1121-E. Definitions.
The following words and phrases when used in this part shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Commission." The Pennsylvania Public Utility Commission.
"Department." The Department of Revenue of the Commonwealth.
"Fund." The Unconventional Gas Well Fund established under
58 Pa.C.S. § 2314 (relating to distribution of fee).
"Highway mileage." The number of miles of public roads and
streets most recently certified by the Department of
Transportation as eligible for distribution of liquid fuels
funds under the act of June 1, 1956 (1955 P.L.1944, No.655),
referred to as the Liquid Fuels Tax Municipal Allocation Law.
"Municipality." A borough, city, town or township.
"Number of spud unconventional gas wells." The most recent
numerical count of spud unconventional gas wells on the
inventory maintained and provided to the commission by the
Department of Environmental Protection as of the last day of
each month.
"Population." As follows:
(1) Population of this Commonwealth and population of a
county shall be determined using the United States Census
Bureau's most recently released Annual Estimates of the
Resident Population for Counties of Pennsylvania.
(2) Population of a municipality shall be determined
using the United States Census Bureau's most recently
released Annual Estimates for the Resident Population for
Incorporated Places in Pennsylvania.
(3) Population of municipalities not included in the
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report referenced under paragraph (2) shall be determined
using the United States Census Bureau's most recently
released Annual Estimates of the Resident Population for
Minor Civil Divisions in Pennsylvania.
"Spud." The actual start of drilling an unconventional gas
well.
"Unconventional gas well." A bore hole drilled or being
drilled for the purpose of or to be used for the production of
natural gas from an unconventional formation.
Section 1122-E. Powers of commission.
The commission may make inquiries and determinations
necessary to make distributions under this part.
Section 1123-E. Well information.
(a) List of wells.--The Department of Environmental
Protection shall provide the commission and, upon request, a
county with a list of all spud unconventional gas wells for
which the department has issued permits. The Department of
Environmental Protection shall update the list and provide it to
the commission on a monthly basis.
(b) Notification to commission.--A producer shall notify the
commission of the following within 30 days after a calendar
month in which the change occurs:
(1) The spudding of an unconventional gas well.
(2) The initiation of production at an unconventional
gas well.
(3) The removal of an unconventional gas well from
production.
(c) Notification to department.--The commission shall notify
the department each month of the information collected under
subsection (b).
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Section 1124-E. Unconventional Gas Well Fund.
(a) Expiration of fee.--Notwithstanding provisions of 58
Pa.C.S. § 2318 (relating to expiration) and except as provided
in subsection (b), the provisions of 58 Pa.C.S. Ch. 23 (relating
to unconventional gas well fee) shall continue in full force and
effect until the day immediately prior to the effective date of
this section. The unconventional gas well fee based upon
activity in calendar year 2017 shall be due and payable by April
1, 2018, and shall be deposited into the fund.
(b) Unconventional Gas Well Fund.--The fund shall continue
beyond the expiration of the unconventional gas well fee
provided in subsection (a) and shall continue to be administered
by the commission. All money in the fund following the deposit
provided in subsection (a) shall remain in the fund and be
distributed as provided in this part.
Section 1125-E. Distribution to conservation districts and
State agencies.
(a) Transfer.--From revenue collected under this article for
each calendar year, the department shall transfer to the fund,
to the extent available, the following amounts which are
appropriated and shall be distributed by the commission in the
following order of priority:
(1) To county conservation districts, $8,000,000 as
follows:
(i) The amount of $4,000,000 shall be distributed by
dividing the amount equally among conservation districts
for uses consistent with the act of May 15, 1945
(P.L.547, No.217), known as the Conservation District
Law.
(ii) The amount of $4,000,000 shall be distributed
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by the State Conservation Commission in a manner
consistent with the Conservation District Law and the
provisions of 25 Pa. Code Ch. 83 Subch. B (relating to
Conservation District Fund Allocation Program-Statement
of Policy).
(2) To the Pennsylvania Fish and Boat Commission,
$1,200,000 for costs relating to the review of applications
for permits to drill unconventional gas wells.
(3) To the Department of Environmental Protection,
$6,200,000 for the administration of this article and the
enforcement of acts relating to clean air and clean water.
(4) To the Pennsylvania Emergency Management Agency,
$950,000 for emergency response planning, training and
coordination related to natural gas production from
unconventional gas wells.
(5) To the Office of the State Fire Commissioner,
$950,000 for the development, delivery and sustainment of
training and grant programs for first responders and the
acquisition of specialized equipment for response to
emergencies relating to natural gas production from
unconventional gas wells.
(6) To the Department of Transportation, $2,000,000 for
rail freight assistance.
(7) To the commission, $1,200,000 for costs associated
with implementing this chapter.
(b) Report.--An agency or organization that receives money
under this section shall, by October 31, 2018, and October 31 of
each year thereafter, submit to the Secretary of the Budget and
the Appropriations Committee of the Senate and the
Appropriations Committee of the House of Representatives a
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report itemizing and explaining the use of the money.
(c) Distribution.--Distribution of funds under this section
shall be contingent on availability of funds. If sufficient
funds are not available, the commission shall disburse funds on
a pro rata basis.
Section 1126-E. Appropriation and distribution to counties and
municipalities.
(a) Transfer.--Beginning June 1, 2018, after the transfer of
the amount under section 1125-E from revenue collected under
this article for each calendar year, the department shall
transfer to the fund, to the extent available and before any
other funds from the tax are expended in a fiscal year, the
funds necessary to satisfy the annual obligations of the
Unconventional Gas Well Impact Fund for counties and
municipalities for purposes authorized under subsection (d).
Counties and municipalities, where appropriate, may jointly fund
projects that cross jurisdictional lines. The commission shall
distribute the funds appropriated in this subsection as follows
by July 1, 2018, and each July 1 thereafter:
(1) Thirty-six percent shall be distributed to counties
in which a spud unconventional gas well is located. The
amount distributed to each county shall be determined under
the following formula:
(i) Divide:
(A) the number of spud unconventional gas wells
in the county; by
(B) the number of spud unconventional gas wells
in this Commonwealth.
(ii) Multiply:
(A) the quotient under subparagraph (i); by
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(B) the amount available for distribution under
paragraph (3).
(2) Thirty-seven percent shall be distributed to
municipalities in which a spud unconventional gas well is
located. The amount distributed to each municipality shall be
determined under the following formula:
(i) Divide:
(A) the number of spud unconventional gas wells
in the municipality; by
(B) the number of spud unconventional gas wells
in this Commonwealth.
(ii) Multiply:
(A) the quotient under subparagraph (i); by
(B) the amount available for distribution under
this paragraph.
(3) Twenty-seven percent shall be distributed to
municipalities located in a county in which a spud
unconventional gas well is located. The amount distributed to
each municipality shall be made as follows:
(i) Divide:
(A) the number of spud unconventional gas wells
in the county; by
(B) the number of spud unconventional gas wells
in this Commonwealth.
(ii) Multiply:
(A) the quotient under subparagraph (i); by
(B) the amount available for distribution under
this paragraph.
(iii) Fifty percent of the product under
subparagraph (ii) shall be distributed to each
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municipality in which a spud unconventional gas well is
located, that is contiguous with a municipality in which
a spud unconventional gas well is located or that is
located within five linear miles of a spud unconventional
gas well. The distribution shall be made as follows:
(A) Fifty percent of the amount available under
this subparagraph to each municipality under the
following formula:
(I) Divide:
(a) the population of the eligible
municipality within the county; by
(b) the total population of the eligible
municipalities within the county.
(II) Multiply:
(a) the quotient under subclause (I); by
(b) the amount allocated to the county
under this subparagraph.
(B) Fifty percent of the amount available under
this subparagraph shall be distributed to each
municipality under the following formula:
(I) Divide:
(a) the highway mileage of the eligible
municipality within the county; by
(b) the total highway mileage of the
eligible municipalities within the county.
(II) Multiply:
(a) the quotient under subclause (I); by
(b) the amount allocated to the county
under this subparagraph.
(iv) Fifty percent of the product under subparagraph
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(ii) shall be distributed to each municipality in the
county regardless of whether an unconventional gas well
is located in the municipality. The distribution shall be
made as follows:
(A) Fifty percent of the amount available under
this subparagraph shall be distributed to each
municipality under the following formula:
(I) Divide:
(a) the population of the municipality
within the county; by
(b) the total population of the county.
(II) Multiply:
(a) the quotient under subclause (I); by
(b) the amount allocated to the county
under this paragraph.
(B) Fifty percent of the amount available under
this subparagraph shall be distributed to each
municipality under the following formula:
(I) Divide:
(a) the highway mileage of the
municipality within the county; by
(b) the total highway mileage of the
county.
(II) Multiply:
(a) the quotient under subclause (I); by
(b) the amount allocated to the county
under this subparagraph.
(b) Restriction.--The following shall apply:
(1) The amount allocated to each municipality under
subsection (a) may not exceed the greater of $500,000 or 50%
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of the total budget for the prior fiscal year beginning with
the 2010 budget year and continuing every year thereafter,
adjusted to reflect any upward changes in the Consumer Price
Index for All Urban Consumers for the Pennsylvania, New
Jersey, Delaware and Maryland area in the preceding 12
months. The remaining money after allocation under subsection
(a) shall be retained by the commission and transferred to
the Commonwealth Financing Authority.
(2) The remaining funds under paragraph (1) shall be
used for grants to schools, hospitals and small businesses to
obtain access to natural gas:
(i) The Commonwealth Financing Authority shall give
priority to applications that will result in adjoining
residential and nonresidential properties obtaining
natural gas.
(ii) Grants may provide for up to 50% of the cost of
the project.
(c) Use of funds.--A county or municipality receiving funds
under subsection (a) shall use the funds received only for the
following purposes associated with natural gas production from
unconventional gas wells within the county or municipality and
in a manner consistent with the provisions of 58 Pa.C.S. Ch. 33
(relating to local ordinances relating to oil and gas
operations):
(1) Construction, reconstruction, maintenance and repair
of roadways, bridges and public infrastructure.
(2) Water, storm water and sewer systems, including
construction, reconstruction, maintenance and repair.
(3) Emergency preparedness and public safety, including
law enforcement and fire services, hazardous material
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response, 911 service operations, equipment acquisition and
other services.
(4) Environmental programs, including trails, parks and
recreation, open space, flood plain management, conservation
districts and agricultural preservation.
(5) Preservation and reclamation of surface and
subsurface waters and water supplies.
(6) Tax reductions, including homestead exclusions.
(7) Projects to increase the availability of safe and
affordable housing to residents.
(8) Records management systems and personnel in the
office of recorder of deeds, geographic information systems
and information technology.
(9) The delivery of social services.
(10) Judicial services.
(11) For deposit into the county or municipality's
capital reserve fund if the funds are used solely for a
purpose under this subsection.
(12) Career and technical centers for training of
workers in the oil and gas industry.
(13) Local or regional planning initiatives under the
act of July 31, 1968 (P.L.805, No.247), known as the
Pennsylvania Municipalities Planning Code.
(14) Grants to residential property owners, schools,
hospitals and small businesses to obtain access to natural
gas.
(d) Prohibition.--Funds distributed under subsection (a) may
not be used for the purpose of litigation.
(e) Availability of funds.--Distribution of funds under this
section shall be contingent on availability of funds. If
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sufficient funds are not available, the commission shall
disburse funds on a pro rata basis.
Section 1127-E. Housing Affordability and Rehabilitation
Enhancement Fund.
(a) Transfer to Housing Affordability and Rehabilitation
Fund.--After the transfer of the amount under section 1125-E and
section 1126-E, from revenue collected under this article for
each calendar year, the department shall transfer $9,647,000 to
the Housing Affordability and Rehabilitation Enhancement Fund.
(b) Purposes.--Funds under subsection (a) shall be used for
the following purposes:
(1) To provide support to projects in a county in which
producing unconventional gas wells are located that increase
availability of quality, safe, affordable housing for low-
income and moderate-income individuals or families, persons
with disabilities or elderly persons.
(2) To provide rental assistance in a county in which
producing unconventional gas wells are located to persons or
families whose household income does not exceed the area
median income.
(c) Amount.--No less than 50% of the funds available under
this section may be used in fifth, sixth, seventh and eighth
class counties.
Section 1128-E. Projects of Statewide significance.
(a) Distribution.--After the transfer of the amount under
sections 1125-E, 1126-E and 1127-E from revenue collected under
this article for each calendar year, the department shall
transfer, to the extent available, $83,469,000 to the fund,
which amount is appropriated and shall be distributed by the
commission by July 1, as follows:
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(1) To the Commonwealth Financing Authority, $16,420,000
for grants to eligible applicants for the following:
(i) Acid mines, including damage, abatement and
cleanup and mine reclamation, with priority given to
projects that recycle and treat water for use in drilling
operations.
(ii) Orphan or abandoned oil and gas well plugging.
(iii) Complying with the act of January 24, 1966
(1965 P.L.1535, No.537), known as the Pennsylvania Sewage
Facilities Act.
(iv) Planning acquisition, development,
rehabilitation and repair of green ways, recreational
trails, open space, parks and beautification projects.
(v) Programs to establish baseline water quality
data on private water supplies.
(vi) Watershed programs and related projects.
(vii) Flood control projects. Up to 25% of the funds
distributed to the Commonwealth Financing Authority under
this paragraph may be utilized for projects under this
subparagraph.
(2) To the Environmental Stewardship Fund, $8,210,000.
(3) To the Highway Bridge Improvement Restricted Account
within the Motor License Fund, $20,525,000 to counties to be
distributed to fund the cost of the replacement or repair of
locally owned at-risk deteriorated bridges. Funds shall be
distributed to counties proportionately based on the
population of the county as follows:
(i) In each county, the distribution shall be
according to the following formula:
(A) Divide:
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(I) the total population of the county; by
(II) the total population of this
Commonwealth.
(B) Express the quotient under clause (A) as a
percentage.
(C) Multiply:
(I) the percentage under clause (B); by
(II) the amount of money to be distributed
under this paragraph.
(ii) Each county shall receive a minimum of $40,000,
to the extent funds are available.
(iii) The Department of Transportation shall release
money under this paragraph upon approval of a plan
submitted by a county or municipality to repair an at-
risk deteriorated bridge. The plan must include funding
for replacement or repair.
(iv) A county of the first or second class may
submit a plan to use the county's funds under this
paragraph for at-risk deteriorated bridges owned by a
public transportation authority.
(4) For water and sewer projects, $20,526,000. The
following shall apply:
(i) Fifty percent of the amount distributed under
this paragraph shall be transferred to the Pennsylvania
Infrastructure Investment Authority to be used in
accordance with the act of March 1, 1988 (P.L.82, No.16),
known as the Pennsylvania Infrastructure Investment
Authority Act.
(ii) Fifty percent of the amount distributed under
this paragraph shall be transferred to the H2O PA program
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to be used by the Commonwealth Financing Authority in
accordance with section 301 of the act of July 9, 2008
(P.L.908, No.63), known as the H2O PA Act. The
prohibition on grants for projects located in a city or
county of the first or second class under section 301 of
the H2O PA Act shall not apply to funds distributed to
the H2O PA program under this subparagraph.
(5) For the planning, acquisition, development,
rehabilitation and repair of green ways, recreational trails,
open space, natural areas, community conservation and
beautification projects, community and heritage parks and
water resource management, $12,316,000. Funds may be used to
acquire lands for recreational or conservation purposes and
land damaged or prone to drainage by storms or flooding.
Funds shall be distributed to counties proportionately based
on the population of the county as follows:
(i) In each county, the distribution shall be
according to the following formula:
(A) Divide:
(I) the total population of the county; by
(II) the total population of this
Commonwealth.
(B) Express the quotient under clause (A) as a
percentage.
(C) Multiply:
(I) the percentage under clause (B); by
(II) the amount of funds available under
this paragraph.
(ii) Each county shall receive a minimum of $25,000
to the extent funds are available.
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(b) Availability of funds.--Distribution of funds under this
section shall be contingent on availability of funds. If
sufficient funds are not available, the commission shall
disburse funds on a pro rata basis.
(c) Restriction on use of proceeds.--
(1) Funds distributed under subsection (a) may not be
used for the purpose of public relations, outreach not
directly related to project implementation, communications,
lobbying or litigation.
(2) Funds distributed under subsection (a) may not be
used by an authorized organization as defined in 27 Pa.C.S. §
6103 (relating to definitions) for land acquisition unless
the authorized organization has obtained the written consent
of the county and municipality in which the land is situated.
(d) Coordination.--The Department of Environmental
Protection and the Department of Conservation and Natural
Resources shall review each application for funding as requested
by the Commonwealth Financing Authority and provide
recommendations on priority of projects and project approval.
(e) Remaining funds.--Any funds remaining after the
transfers under this section shall be transferred to the
Hazardous Sites Cleanup Fund.
Section 1129-E. Purposes of Statewide importance.
(a) Transfer.--After the transfer of the amounts under
sections 1125-E, 1126-E, 1127-E and 1128-E from revenue
collected under this article for each calendar year, the
department shall transfer all remaining money to the Natural Gas
Drilling Tax Restricted Account established in subsection (b).
(b) Account.--There is established the Natural Gas Drilling
Tax Restricted Account in the General Fund.
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(c) Distribution.--Funds in the account shall be distributed
as follows:
(1) Thirty percent shall be distributed to the
Department of Education for basic education funding of school
districts, including supplemental payments for certain
distressed school districts.
(2) Ten percent shall be distributed to the Department
of Education for accountability block grants.
(3) Fifteen percent shall be distributed to the State
Employees' Retirement Fund for the purpose of reducing
accrued unfunded liabilities.
(4) Fifteen percent shall be distributed to the Public
School Employees' Retirement Fund for the purpose of reducing
accrued unfunded liabilities.
(5) Three and six-tenths percent shall be distributed to
the Department of Drug and Alcohol Programs for drug and
alcohol programs.
(6) Three and six-tenths percent shall be distributed to
the Department of Human Services for intellectual disability
programs.
(7) Two and thirty-five one-hundredths percent shall be
distributed to the Department of Human Services for
behavioral health services.
(8) Two and thirty-five one-hundredths percent shall be
distributed to the Department of Human Services for the Human
Services Development Fund.
(9) One and three-tenths percent shall be distributed to
the Pennsylvania Housing Finance Agency for the Homeowner's
Emergency Mortgage Assistance Program.
(10) Nine-tenths of one percent shall be distributed to
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the Department of Human Services for use for victims of rape
and domestic violence in accordance with section 2333 of the
act of April 9, 1929 (P.L.177, No.175), known as The
Administrative Code of 1929.
(11) Nine-tenths of one percent shall be distributed to
the Department of Military and Veterans Affairs for the
operation and maintenance of veterans' homes.
(12) Six and twenty-five one-hundredths percent shall be
distributed to the Environmental Stewardship Fund.
(13) Two percent shall be distributed to the Department
of Environmental Protection, with half of the money going to
the well plugging account and half of the money to supplement
the operations under section 1901-A of The Administrative
Code of 1929.
(14) Five and twenty-five one-hundredths percent shall
be distributed to the Department of Environmental Protection
for making low-interest loans to support the development of
solar energy.
(15) One and five-tenths percent shall be distributed to
the Keystone Home Energy Loan Program in the Treasury
Department to support home energy efficiency loans.
Section 2. This act shall take effect as follows:
(1) The addition of sections 1103-E and 1106-E of the
act shall take effect July 1, 2017, or immediately, whichever
is later.
(2) The remainder of this act shall take effect January
1, 2018, or immediately, whichever is later.
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