PRIOR PRINTER'S NO. 1238

PRINTER'S NO.  1328

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

1100

Session of

2011

  

  

INTRODUCED BY SCARNATI, CORMAN, BROWNE, VOGEL, SMUCKER, D. WHITE, BRUBAKER, PIPPY, MENSCH, YAW AND PICCOLA, MAY 16, 2011

  

  

SENATOR M. WHITE, ENVIRONMENTAL RESOURCES AND ENERGY, AS AMENDED, JUNE 14, 2011   

  

  

  

AN ACT

  

1

Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated

2

Statutes, imposing a natural gas impact fee and providing for

3

a model zoning ordinance.

4

The General Assembly of the Commonwealth of Pennsylvania

5

hereby enacts as follows:

6

Section 1.  Title 58 of the Pennsylvania Consolidated

7

Statutes is amended by adding a part to read:

8

PART I

9

UNCONVENTIONAL GAS WELLS

10

Chapter

11

23.  Impact Fee

12

25.  Model Ordinance

13

CHAPTER 23

14

IMPACT FEE

15

Sec.

16

2301.  Definitions.

17

2302.  Shale Impact Fee.

 


1

2303.  Administration.

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2

2304.  Well information.

3

2305.  Duties of department.

4

2306.  Meters.

5

2307.  Commission.

6

2308.  Enforcement.

7

2309.  Criminal penalties.

8

2310.  Criminal grading.

9

2311.  Enforcement orders.

10

2312.  Administrative penalties.

11

2313.  Regulations.

12

2314.  Recordkeeping.

13

2315.  Examinations.

14

2316.  Local distribution of fee.

15

2317.  Statewide environmental initiatives.

16

2303.  Shale impact fee housing credit.

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17

2304.  Administration.

18

2305.  Well information.

19

2306.  Duties of department.

20

2307.  Commission.

21

2308.  Enforcement.

22

2309.  Regulations.

23

2310.  Recordkeeping.

24

2311.  Examinations.

25

2312.  Local distribution of fee.

26

2313.  Environmental initiatives distribution of fee.

27

2314.  Expiration.

28

§ 2301.  Definitions.

29

The following words and phrases when used in this chapter

30

shall have the meanings given to them in this section unless the

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1

context clearly indicates otherwise:

2

"Account."  The Shale Impact Account.

3

"Average annual price of natural gas."  The arithmetic mean

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4

of the New York Mercantile Exchange (NYMEX) Henry Hub settled

5

price on the last trading day of each month of a calendar year

6

as reported by the Wall Street Journal for the 12-month period

7

ending December 31.

8

"Barrel."  A barrel of 42 U.S. gallons of natural gas

9

liquids.

10

"Commission."  The Pennsylvania Public Utility Commission.

11

"Department."  The Department of Environmental Protection of

12

the Commonwealth.

13

"Eligible applicants."  A county, municipality, council of

14

governments, watershed organization, institution of higher

15

education, nonprofit organization, Pennsylvania Fish and Boat

16

Commission or an authorized organization as defined in 27

17

Pa.C.S. § 6103 (relating to definitions).

18

"Fee."  The Shale Impact Fee imposed under section 2302

19

(relating to Shale Impact Fee).

20

"Highway mileage."  The number of miles of public roads and

21

streets most recently certified by the Department of

22

Transportation as eligible for distribution of liquid fuels

23

funds under the act of June 1, 1956 (1955 P.L.1944, No.655),

24

referred to as the Liquid Fuels Tax Municipal Allocation Law.

25

"Marginal gas well."  An unconventional gas well capable 

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26

incapable of severing producing more than 60,000 90,000 cubic

<--

27

feet of gas per day during a calendar month, but incapable of

<--

28

severing more than 90,000 cubic feet of gas per day during a

29

calendar month, including production from the zones and

30

multilateral well bores at a single well, regardless of whether

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1

the production is metered separately.

2

"Municipality."  A borough, city, town or township.

3

"Natural gas."  A fossil fuel consisting of a mixture of

4

hydrocarbon gases, primarily methane, and possibly including

5

ethane, propane, butane, pentane, carbon dioxide, oxygen,

6

nitrogen and hydrogen sulfide and other gas species. The term

7

includes natural gas from oil fields known as associated gas or

8

casing head gas, natural gas fields known as nonassociated gas,

9

coal beds, shale beds and other formations. The term does not

10

include coal bed methane.

11

"Natural gas liquids."  Hydrocarbons in natural gas which are

12

separated from the gas as liquids through the process of

13

absorption, condensation, adsorption or other methods in gas

14

processing of cycling plants.

15

"Number of producing unconventional wells."  The most recent

16

numerical count of producing unconventional wells on the

17

inventory maintained and provided to the commission by the

18

department as of the last day of each month.

19

"Price adjustment factor."  One of a range of numerical

<--

20

values used to compute the adjusted fee under section 2302

21

(relating to Shale Impact Fee). The price adjustment factor

22

shall be determined as follows:

23

(1)  If the average annual price of natural gas is less

24

than $5.01, the price adjustment factor shall be five.

25

(2)  If the average annual price of natural gas is $5.01

26

to $6.00, the price adjustment factor shall be equal to the

27

sum of the average annual price plus one.

28

(3)  If the average annual price of natural gas is $6.01

29

to $7.00, the price adjustment factor shall be equal to the

30

sum of the average annual price plus two.

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1

(4)  If the average annual price of natural gas is $7.01

2

to $8.00, the price adjustment factor shall be equal to the

3

sum of the average annual price plus three.

4

(5)  If the average annual price of natural gas is

5

greater than $8.00, the price adjustment factor shall be

6

equal to the sum of the average annual price plus five.

7

"Producer."  A person or its subsidiary, affiliate or holding

8

company that holds a permit or other authorization to engage in

9

the business of severing producing natural gas for sale, profit

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10

or commercial use from an unconventional well in this

11

Commonwealth. The term shall not include a producer that severs 

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12

removes natural gas from a site used to store natural gas that

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13

did not originate from the site.

14

"Shale impact fee housing credit."  The credit provided under

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15

this chapter for a producer, who has a permit from the

16

department to drill for natural gas other than marginal gas in

17

this Commonwealth, upon acceptance of a donation to an optional

18

county affordable housing fund under 53 Pa.C.S. Ch .60 (relating

19

to optional affordable housing funding) of a county in which a

20

producer has active unconventional wells or a nonprofit

21

organization under section 501(c)(3) of the Internal Revenue

22

Code of 1986 (Public Law 99-514, 26 U.S.C. § 501(c)(3)) which is

23

committed to providing low and moderate income housing in a

24

county in which a producer has active unconventional wells.

25

"Unconventional well."  A bore hole drilled or being drilled

26

for the purpose of or to be used for producing oil or gas from a

27

geological formation existing below the base of the Elk

28

Sandstone or its geologic equivalent stratigraphic interval

29

where oil or gas generally cannot be produced at economic flow

30

rates or in economic volumes except by vertical or horizontal

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1

well bores stimulated by hydraulic fracture treatments or by

2

using multilateral well bores or other techniques to expose more

3

of the formation of the well bore.

4

"Unit."

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5

(1)  A thousand cubic feet of natural gas measured at the

6

wellhead at a temperature of 60 degrees Fahrenheit and an

7

absolute pressure of 14.73 pounds per square inch in

8

accordance with American Gas Association Standards and

9

according to Boyle's Law for the measurement of gas under

10

varying pressures with deviations as follows:

11

(i)  The average absolute atmospheric pressure shall

12

be assumed to be 14.4 pounds to the square inch,

13

regardless of elevation or location of point of delivery

14

above sea level or variations in atmospheric pressure

15

from time to time.

16

(ii)  The temperature of the gas passing the meters

17

shall be determined by the continuous use of a recording

18

thermometer installed to properly record the temperature

19

of gas flowing through the meters. The arithmetic average

20

of the temperature recorded each 24-hour day shall be

21

used in computing gas volumes. If a recording thermometer

22

is not installed, or is installed and not operating

23

properly, an average flowing temperature of 60 degrees

24

Fahrenheit shall be used in computing gas volume.

25

(iii)  The specific gravity of the gas shall be

26

determined annually by tests made by the use of an

27

Edwards of Acme gravity balance, or at intervals as

28

necessary. Specific gravity determinations shall be used

29

in computing gas volumes.

30

(iv)  The deviation of the natural gas from Boyle's

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1

Law shall be determined by annual tests or at other

2

shorter intervals as necessary. The apparatus and method

3

used in making the test shall be in accordance with

4

recommendations of the National Bureau of Standards or

5

Report No. 3 of the Gas Measurement Committee of the

6

American Gas Association. The results of the test shall

7

be used in computing the volume of gas delivered under

8

this chapter.

9

(2)  In the case of natural gas produced in liquid form,

10

a unit shall be measured on a 1,000 cubic feet equivalent

11

basis, determined using the ratio of 6,000 cubic feet of

12

natural gas to one barrel of natural gas liquids.

13

"Vertical gas well."  An unconventional well which begins as

14

a vertical linear bore and is not intentionally deviated from

15

the vertical.

16

"Volume adjustment factor."  One of a range of numerical

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17

values used to compute the adjusted fee under section 2302

18

(relating to Shale Impact Fee). The volume adjustment factor

19

shall be determined as follows:

20

(1)  If the annual units of production are less than

21

21,901, the volume adjustment factor shall be zero.

22

(2)  If the annual units of production are 21,901 to

23

90,000, the volume adjustment factor shall be 0.2.

24

(3)  If the annual units of production are 90,001 to

25

180,000, the volume adjustment factor shall be 0.3.

26

(4)  If the annual units of production are 180,001 to

27

360,000, the volume adjustment factor is 0.4.

28

(5)  If the annual units of production are 360,001 to

29

750,000, the volume adjustment factor is 0.5.

30

(6)  If the annual units of production are 750,001 to

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1

1,000,000, the volume adjustment factor is 0.6.

2

(7)  If the annual units of production are 1,000,001 to

3

1,350,000, the volume adjustment factor is 0.7.

4

(8)  If the annual units of production are greater than

5

1,350,001, the volume adjustment factor is 0.8.

6

§ 2302.  Shale Impact Fee.

7

(a)  Imposition.--Beginning Except as provided under

<--

8

subsection (c), beginning January 1, 2010, there shall be

9

imposed a Shale Impact Fee on each unconventional well producing

10

gas in this Commonwealth.

11

(b)  Fee.--The fee shall consist of a base fee of $10,000 for

<--

12

each unconventional well subject to the following adjustments as

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13

follows:

14

(1)  The fee shall be adjusted by multiplying the base

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15

fee amount times the volume adjustment factor times the price

16

adjustment factor rounded to the nearest $100.

17

(2)  If the natural gas severed from more than one

18

unconventional well is measured by a single wellhead meter,

19

the combined volumes of gas produced shall be divided by the

20

number of unconventional wells and each producer of an

21

unconventional well shall use this quotient in determining

22

its volume adjustment factor.

23

(3)  The fee for a marginal gas well or vertical gas well

24

shall be $10,000 and shall not be subject to adjustment under

25

paragraph (1).

26

(1)  For the first year of production, the fee shall be

<--

27

$40,000.

28

(2)  For the second year of production, the fee shall be

29

$30,000.

30

(3)  For the third year of production, the fee shall be

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1

$20,000.

2

(4)  For the fourth year of production through the tenth

3

year of production, the fee shall be $10,000.

4

(c)  Exemption.--The fee under subsection (a) shall not be

5

imposed on marginal gas wells.

6

§ 2303.  Shale impact fee housing credit.

7

(a)  General rule.--A producer who has a permit from the

8

department to drill for natural gas, other than marginal gas, in

9

this Commonwealth may apply for a shale impact fee credit upon

10

acceptance of a donation to an optional county affordable

11

housing fund under 53 Pa.C.S. Ch 60 (relating to optional

12

affordable housing funding) of a county in which a producer has

13

active unconventional wells.

14

(b)  Application.--An application shall be developed by the

15

commission.

16

(c)  Maximum amount.--A producer may claim a credit of no

17

greater than 30% of the producer's impact fee liability under

18

this chapter.

19

(d)  Eligible activities.--A county accepting a donation to

20

the optional county affordable housing fund may utilize the

21

funding for the following purposes:

22

(1)  To provide support to projects that meet eligibility

23

criteria as set forth in the programs administered by the

24

Pennsylvania Housing Finance Agency.

25

(2)  To provide support to projects that increase the

26

availability of quality, safe, affordable housing for low-

27

income and moderate-income individuals or families, persons

28

with disabilities or elderly persons.

29

(3)  To provide rental assistance to persons or families

30

whose household income does not exceed the area median

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1

income.

2

§ 2303 2304.  Administration.

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3

(a)  Commission.--On or before January 31 of each year, the

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4

commission shall calculate and determine the average annual

5

price of natural gas for the previous calendar year.

6

(b)  Notice.--Notice of the average annual price shall be

7

provided to producers of unconventional wells and shall be

8

published on the commission's Internet website.

9

(c)  Method.--If publication of the New York Mercantile

10

Exchange (NYMEX) Henry Hub settled price is discontinued, the

11

average annual price of natural gas then in effect shall not be

12

adjusted until a comparable method to determine the average

13

annual price of natural gas is adopted by commission rule. If

14

the base data of the NYMEX Henry Hub settled price is

15

substantially revised, the commission shall make appropriate

16

changes to ensure that the average annual price of natural gas

17

is reasonably consistent with the result that would have been

18

attained had the substantial revision not been made.

19

(d) (a)  Report.--By March 1, 2012, and each March 1

<--

20

thereafter, each producer shall submit a report and payment of

21

the fee with the commission on a form prescribed by the

22

commission for the previous calendar year. The report shall

23

include the following:

24

(1)  Annual units of production severed by the producer

25

for each unconventional well for the reporting period.

26

(2)  The number of producing unconventional wells of a

27

producer in each county and municipality.

28

(e) (b)  Report and fee for 2010.--For calendar year 2010, a

<--

29

report pursuant to subsection (d)(1) (a)(1) and (2) shall be

<--

30

filed by August 1, 2011, and the fee due shall be paid as

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1

follows:

2

(1)  Fifty percent of the fee shall be paid by August 1,

3

2011.

4

(2)  Fifty percent of the fee shall be paid by November

5

1, 2011.

6

(f) (c)  Fee due date.--Except as provided under subsection

<--

7

(e)(2) (b)(2), the fee shall be due on the day the report is

<--

8

required to be filed. The fee shall become delinquent if not

9

remitted to the commission on the reporting date.

10

(g) (d)  Cost.--Beginning March 2, 2012, and each March 2

<--

11

thereafter, the commission shall determine the reasonable annual

12

cost to collect and distribute the fee in accordance with this

13

chapter and shall deduct that amount from the total amount of

14

fees collected under this chapter. On August 1, 2011, the amount

15

to collect and distribute the fee may be deducted from the total

16

amount of fees collected for 2010. Fees collected under this

17

section are hereby annually appropriated to the commission to

18

carry out its duties under this chapter.

19

§ 2304 2305.  Well information.

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20

(a)  List.--The department shall provide the commission with

21

a list of all unconventional wells that have received a drilling

22

permit from the department. The list shall be updated on a

23

monthly basis.

24

(b)  Updates.--A producer subject to the fee shall notify the

25

commission of the following within 30 days after a calendar

<--

26

month in which the change occurs:

<--

27

(1)  The initiation of production at a well or the

28

removal of a well from production.

29

(2)  The use of a different accredited laboratory to

30

issue a wellhead meter certification. initiation of

<--

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1

production at a well or the removal of a well from production

2

occurs.

3

§ 2305 2306.  Duties of department.

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4

(a)  Confirmation of payment.--Prior to issuing a permit to

5

drill an unconventional well in this Commonwealth, the

6

department shall determine whether the producer has paid all

7

fees owed under section 2302 (relating to Shale Impact Fee).

8

(b)  Prohibition.--The department shall not issue a permit to

9

drill an unconventional well until all fees owed under section

10

2302 that are not in dispute have been paid to the commission.

11

§ 2306.  Meters.

<--

12

A producer who drills an unconventional well in this

13

Commonwealth shall provide and maintain a wellhead meter at the

14

unconventional well that is tested, calibrated and maintained in

15

accordance with industry standards approved by the commission. A

16

wellhead meter installed after the effective date of this

17

section shall be a digital meter. Wellhead meters shall not be

18

subject to 3 Pa.C.S. Ch. 41 (relating to weights and measures). 

19

Multiple wells located on the same drilling pad may utilize the

20

same meter subject to section 2302(b)(2) (relating to Shale

21

Impact Fee).

22

§ 2307.  Commission.

23

(a)  Powers.--The commission shall have the authority to make

24

all inquiries and determinations necessary to calculate and

25

collect the fee imposed under this chapter, including, if

26

applicable, interest and penalties.

27

(b)  Notice.--If the commission determines that the fee has

28

not been paid in full, it may issue a notice of the amount due

29

and demand for payment and shall set forth the basis for the

30

determination.

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1

(c)  Address.--Notice of failure to pay the correct fee shall

2

be sent to the producer at its registered address via certified

3

mail.

4

(d)  Time period.--The commission may challenge the amount of

5

a fee paid under this chapter within three years after the date

6

the report under section 2303(d) 2304(d) (relating to

<--

7

administration) is filed.

8

(e)  Intent.--If no report is filed or a producer files a

9

false or fraudulent return with the intent to evade the fee, an

10

assessment of the amount owed may be made at any time.

11

§ 2308.  Enforcement.

12

(a)  Assessment.--The commission shall assess interest on any

13

delinquent fee at the rate prescribed under section 806 of the

14

act of April 9, 1929 (P.L.343, No.176), known as The Fiscal

15

Code.

16

(b)  Penalty.--In addition to the interest under subsection

17

(a), if a producer fails to make timely payment of the fee,

18

there shall be added to the amount of the fee due a penalty of

19

5% of the amount of the fee if failure to file a timely payment

20

is for not more than one month, with an additional 5% penalty

21

for each additional month, or fraction of a month, during which

22

the failure continues, not to exceed 25% in the aggregate.

23

(c)  Timely payment.--If the commission determines that a

24

producer has not made a timely payment of the fee, the

25

commission shall send a written notice of the amount of the

26

deficiency to the producer within 30 days from the date of

27

determining the deficiency. If the producer has not provided a

28

complete and accurate statement of the volume of gas extracted

29

for the payment period, the commission may estimate the volume

30

in its deficiency notice.

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1

(d)  Remedies.--The remedies provided under this chapter are

2

in addition to any other remedies provided at law or in equity.

3

(e)  Lien.--Fines, fees, interest and penalties shall be

4

collectible in the manner provided by law for the collection of

5

debts. If the producer liable to pay any amount neglects or

6

refuses to pay the amount after demand, the amount, together

7

with costs which may accrue, shall be a judgment in favor of the

8

Commonwealth upon the property of the producer, but only after

9

the judgment has been entered and docketed of record by the

10

prothonotary of the county where the property is situated. The

11

Commonwealth may transmit to the prothonotaries of the

12

respective counties certified copies of the judgments, and it

13

shall be the duty of each prothonotary to enter and docket the

14

same of record in his office and to index each judgment, without

15

requiring the payment of costs as a condition precedent to the

16

entry of the judgment.

17

§ 2309.  Criminal penalties.

<--

18

(a)  Offense defined.--It shall be unlawful for any producer

19

to:

20

(1)  Intentionally make or cause to be made a false or

21

fraudulent report under this chapter with the intent to

22

defraud the Commonwealth.

23

(2)  Refuse to permit the commission or its authorized

24

agents to examine books, records or papers or hinder or

25

obstruct the commission in the performance of a duty under

26

this chapter.

27

(3)  Violate 18 Pa.C.S. § 4903 (relating to false

28

swearing) or 4904 (relating to unsworn falsification to

29

authorities), including a violation in providing or preparing

30

information required by this chapter.

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1

(4)  Intentionally fail to make timely payment of the

2

fee.

3

(b)  Probable cause.--If the commission believes that

4

probable cause of a violation under this section exists, the

5

commission shall refer the case to the Attorney General for

6

investigation.

7

§ 2310.  Criminal grading.

8

(a)  Summary offense.--Except as set forth in subsection (b),

9

a producer that willfully violates this chapter or an order

10

issued under this chapter commits a summary offense and shall,

11

upon conviction, be sentenced to pay a fine of not less than

12

$100 nor more than $1,000 and costs or to a term of imprisonment

13

for not more than 30 days, or both.

14

(b)  Misdemeanor offense.--A producer that commits a second

15

or subsequent violation of this chapter or an order of the

16

commission commits a misdemeanor and shall, upon conviction, be

17

sentenced to pay a fine of not less than $1,000 but not more

18

than $10,000 per day for each violation or to imprisonment for a

19

period of not more than one year, or both.

20

(c)  Violations.--Each violation for each separate day and

21

each violation of this chapter or order issued under this

22

chapter shall constitute a separate offense under subsection (a)

23

or (b).

24

§ 2311.  Enforcement orders.

25

(a)  Issuance.--The commission may issue an order as

26

necessary to enforce this chapter. An order issued under this

27

section shall take effect upon notice, unless the order

28

specifies otherwise. An appeal of the order must be in

29

accordance with 66 Pa.C.S. Ch. 3 Subch. B (relating to

30

investigations and hearings).

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1

(b)  Compliance.--A producer has the duty to proceed

2

diligently to comply with an order issued under subsection (a).

3

If a producer fails to proceed diligently or to comply with an

4

order within the time required, the producer shall be guilty of

5

contempt and shall be punished by the court in an appropriate

6

manner. The commission shall apply to the Commonwealth Court,

7

which shall have jurisdiction over matters relating to contempt.

8

§ 2312.  Administrative penalties.

9

(a)  Civil penalties.--In addition to any other proceeding

10

authorized by law, the commission may assess a civil penalty

11

upon a producer for the violation of this chapter. In

12

determining the amount of the penalty, the commission shall

13

consider the willfulness of the violation and other relevant

14

factors.

15

(b)  Separate offense.--Each violation for each separate day

16

and each violation of this chapter shall constitute a separate

17

offense.

18

(c)  Limitation of actions.--Notwithstanding any limitation

19

in 42 Pa.C.S. Ch. 55 Subch. B (relating to civil actions and

20

proceedings), an action under this section must be brought

21

within three years of the violation.

22

(d)  Procedure.--A penalty under this chapter is subject to

23

66 Pa.C.S. Ch. 3 Subch. B (relating to investigations and

24

hearings).

25

§ 2313 2309.  Regulations.

<--

26

The commission shall promulgate regulations necessary to

27

enforce this chapter.

28

§ 2314 2310.  Recordkeeping.

<--

29

A producer liable for the fee imposed under this chapter

30

shall keep records, make reports and comply with regulations of

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1

the commission. If necessary, the commission may require a

2

producer to make reports, render statements or keep records as

3

the commission deems sufficient to determine liability for the

4

fee.

5

§ 2315 2311.  Examinations.

<--

6

(a)  Access.--The commission or its authorized agents or

7

representatives shall:

8

(1)  Have access to the books, papers and records of any

9

producer in order to verify the accuracy and completeness of

10

a report filed or fee paid under this chapter.

11

(2)  Require the preservation of all books, papers and

12

records for any period deemed proper not to exceed three

13

years from the end of the calendar year to which the records

14

relate.

15

(3)  Examine any employee of a producer under oath

16

concerning the severing of natural gas subject to a fee or

17

any matter relating to the enforcement of this chapter.

18

(4)  Compel the production of books, papers and records

19

and the attendance of all individuals who the commission

20

believes to have knowledge of relevant matters in accordance

21

with 66 Pa.C.S. (relating to public utilities).

22

(b)  Unauthorized disclosure.--Any information obtained by

23

the commission as a result of any report, examination,

24

investigation or hearing under this chapter shall be

25

confidential, except for official purposes, in accordance with

26

judicial order or as otherwise provided by law. An individual

27

unlawfully divulging the information commits a misdemeanor and

28

shall, upon conviction, be sentenced to pay a fine or not more

29

than $1,000 and costs of prosecution or to imprisonment for not

30

more than one year, or both.

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1

§ 2316 2312.  Local distribution of fee.

<--

2

(a)  Establishment.--There is hereby established a restricted

3

receipts account to be known as the Shale Impact Account to be

4

administered by the commission.

5

(b)  Deposit.--All fees imposed shall be deposited into the

6

account.

7

(c)  Conservation districts.--

8

(1)  For 2010, $2,500,000 from the account shall be

9

distributed to county conservation districts transferred to

<--

10

the Conservation District Fund to be distributed to county

11

conservation districts by the State Conservation Commission.

12

(2)  For 2011, $5,000,000 from the account shall be

13

distributed to county conservation districts transferred to

<--

14

the Conservation District Fund to be distributed to county

15

conservation districts by the State Conservation Commission.

16

(3)  For 2012, and every year thereafter, $7,500,000 from

17

the account shall be distributed to county conservation

<--

18

districts transferred to the Conservation District Fund to be

<--

19

distributed to county conservation districts by the State

20

Conservation Commission.

21

(4)  Funds under paragraphs (1), (2) and (3) shall be

22

distributed in accordance with the following:

23

(i)  One-half shall be distributed by dividing the

24

amount equally among conservation districts for any use

<--

25

consistent with the act of May 15, 1945 (P.L.547,

26

No.217), known as the Conservation District Law.

27

(ii)  One-half shall be distributed using a formula

<--

28

that divides the annual amount appropriated to each

29

county conservation district by the county from the

30

county general fund, special fund and grant sources by

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1

the amount appropriated to county conservation districts

2

by counties from the county general fund, special fund

3

and grant sources and multiplying the resulting

4

percentage by the funds available.

5

(ii)  One-half shall be distributed by the State

<--

6

Conservation Commission in a manner consistent with the

7

Conservation District Law and the provisions of the State

8

Conservation Commission's Conservation District Fund

9

Allocation Program—Statement of Policy under 25 Pa. Code

10

Ch. 83 Subch. B (relating to Conservation District Fund

11

Allocation Program—Statement of Policy).

12

(c.1)  Office of State Fire Commissioner.--

13

(1)  For year 2012, and each year thereafter, $1,000,000

14

shall be annually distributed to the Office of the State Fire

15

Commissioner.

16

(2)  Funds under paragraph (1) shall be used for the

17

following purposes:

18

(i)  To support training programs for emergency

19

responders located in regions of this Commonwealth where

20

drilling of Marcellus Shale or other unconventional

21

resources occurs.

22

(ii)  To provide grants to fire departments for the

23

purchase of special equipment required to respond to

24

fires and other emergencies related to natural gas

25

drilling activity.

26

(d)  Distribution.--Following distribution under subsection

27

(c), 60% of the revenues remaining in the account are hereby

28

appropriated for the purposes authorized under this section.

29

Local governments are encouraged, where appropriate, to jointly

30

fund projects that cross jurisdictional lines. The commission 

- 19 -

 


1

shall distribute the funds appropriated under this subsection as

2

follows within 45 days after the date the fee is remitted:

3

(1)  Thirty-six percent shall be distributed to counties

4

in which producing unconventional gas wells are located. The

5

amount for each county shall be determined using a formula

6

that divides the number of producing unconventional gas wells

7

in the county by the number of producing unconventional gas

8

wells in this Commonwealth and multiplies the resulting

9

percentage by the amount available for distribution under

10

this paragraph.

11

(2)  Thirty-seven percent shall be distributed to

12

municipalities in which producing unconventional gas wells

13

are located. The amount for each municipality shall be

14

determined using a formula that divides the number of

15

producing unconventional gas wells in the municipality by the

16

number of producing unconventional gas wells in this

17

Commonwealth and multiplies the resulting percentage by the

18

amount available for distribution under this paragraph.

19

(3)  Twenty-seven percent shall be distributed to

20

municipalities located in a county in which producing

21

unconventional gas wells are located. The amount available

22

for distribution in each county shall be determined by

23

dividing the number of producing unconventional gas wells in

24

the county by the number of producing unconventional gas

25

wells in this Commonwealth and multiplying the resulting

26

percentage by the amount available for distribution under

27

this paragraph. The resulting amount available for

28

distribution in each county in which producing unconventional

29

gas wells are located shall be distributed to each

30

municipality in the county regardless of whether an

- 20 -

 


1

unconventional gas well is located in the municipality as

2

follows:

3

(i)  One-half shall be distributed to each

4

municipality using a formula that divides the population

5

of the municipality within the county by the total

6

population of the county and multiplies the resulting

7

percentage by the amount available for distribution to

8

the county under this subparagraph.

9

(ii)  One-half shall be distributed to each

10

municipality using a formula that divides the highway

11

mileage of the municipality within the county by the

12

total highway mileage of the county and multiplies the

13

resulting percentage by the amount available for

14

distribution to the county under this subparagraph.

15

(e)  Use of funds.--A county or municipality receiving funds

16

under this subsection shall make use of funds received only for

17

the following purposes:

18

(1)  Construction, reconstruction, maintenance and repair

19

of roadways, bridges and public infrastructure.

20

(2)  Water, storm water and sewer systems, including

21

construction, reconstruction, maintenance and repair.

22

(3)  Emergency preparedness and public safety, including

23

police and fire services.

24

(4)  Environmental programs, including trails, parks and

<--

25

recreation, open space, flood plain management, conservation

26

districts and agricultural preservation.

27

(5) (4)  Preservation and reclamation of surface and

<--

28

subsurface waters and water supplies.

29

(6) (5)  Tax reductions, including homestead exclusions.

<--

30

(7) (6)  Records management, geographic information

<--

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1

systems and information technology.

2

(8)  To provide safe and affordable housing to residents.

<--

3

§ 2317.  Statewide environmental initiatives.

4

(7)  To provide for a project, approved by the governing

<--

5

body of a county or municipality, that increases the

6

availability of quality affordable housing, either for sale

7

or rental, to residents whose annual income is less than the

8

area median income.

9

(f)  Annual reports.--

10

(1)  The commission shall submit an annual report on all

11

distributions of funds in the Shale Impact Account under this

12

section. The report shall be submitted to the chairman and

13

minority chairman of the Appropriations Committee of the

14

Senate, the chairman and minority chairman of the

15

Appropriations Committee of the House of Representatives, the

16

chairman and minority chairman of the Environmental Resources

17

and Energy Committee of the Senate and the chairman and

18

minority chairman of the Environmental Resources and Energy

19

Committee of the House of Representatives. The report shall

20

be submitted by August 31, 2012, and by August 31 of each

21

year thereafter.

22

(2)  All counties and municipalities receiving

23

distributions of funds from the Shale Impact Account under

24

this section shall submit information to the commission on a

25

form prepared by the commission that sets forth the amount

26

and use of the funds received in the prior calendar year.

27

The form shall set forth whether the funds received were

28

committed to a specific project or use as allowed in this

29

section.

30

(3)  Every county and municipality receiving funds under

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1

this section shall publish a report, which at a minimum shall

2

include the amount of funds received under this section and

3

the purposes for which the funds were expended. The reports

4

shall be published on the county or municipality's publicly

5

accessible Internet website at least annually.

6

§ 2313.  Environmental initiatives distribution of fee.

7

(a)  Deposit and distribution.--Following distribution under

8

section 2316(c) 2312(c), 40% of the revenues in the account are

<--

9

hereby appropriated for distribution by the commission as

10

follows:

11

(1)  Eighty Sixty percent to the Commonwealth Financing

<--

12

Authority to be utilized for grants to eligible applicants

13

for the following purposes:

14

(i)  To implement acid mine drainage abatement and

<--

15

cleanup efforts, mine reclamation and to plug abandoned

16

and orphaned oil and gas wells.

17

(i)  To implement acid mine drainage abatement and

<--

18

cleanup efforts and mine reclamation with a priority

19

given to those projects that recycle and treat mine

20

drainage water for use in drilling operations.

21

(ii)  To plug abandoned and orphaned oil and gas

22

wells.

23

(ii) (iii)  Grants for watershed protection as

<--

24

defined in 27 Pa.C.S. § 6103 (relating to definitions).

25

(iii) (iv)  Planning and enforcement authorized under

<--

26

section 6 of the act of January 24, 1966 (1965 P.L.1535,

27

No.537), known as the Pennsylvania Sewage Facilities Act.

28

(iv) (v)  Water, storm water and sewer systems,

<--

29

including construction, reconstruction, maintenance and

30

repair.

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1

(v)  The planning, acquisition, development,

<--

2

rehabilitation and repair of greenways, recreational

3

trails, open space, natural areas, community conservation

4

and beautification projects, community and heritage parks

5

and forest conservation.

6

(vi)  Flood control and dam safety projects,

7

including the removal of dams where appropriate.

8

(2)  Ten Twenty percent to the Motor License Fund.

<--

9

(3)  Ten Twenty percent to the Hazardous Sites Cleanup

<--

10

Fund.

11

(4)  No more than 40% of the revenue generated under this

<--

12

section shall be used for the purposes listed under paragraph

13

(1)(v).

14

(b)  Restriction on use of proceeds.--

15

(1)  Funds shall not be granted to an eligible applicant

16

for the purpose of public relations, outreach,

17

communications, lobbying or litigation.

18

(2)  No property purchased using revenue generated under

19

this section may be conveyed or resold to another entity

20

without approval from the Department of Conservation and

21

Natural Resources.

22

(3)  Grants may not be used by an authorized organization

23

as defined in 27 Pa.C.S. § 6103 for land acquisition unless

24

the authorized organization has obtained the written consent

25

of the county and municipality in which the land is situated.

26

(c)  Coordination with other agencies.--The department and

27

the Department of Conservation and Natural Resources shall

28

review applications for funding as requested by the Commonwealth

29

Financing Authority and provide recommendations on priority of

30

projects and project approval for consideration by the

- 24 -

 


1

Commonwealth Financing Authority.

2

§ 2314.  Expiration.

<--

3

(a)  Notice.--The Secretary of State shall, upon the

4

imposition of a severance tax on each unconventional well

5

producing gas in this Commonwealth, submit for publication in

6

the Pennsylvania Bulletin notice of the imposition.

7

(b)  Date.--This chapter shall expire on the date of the

8

publication of the notice under subsection (a).

9

CHAPTER 25

10

MODEL ORDINANCE

11

Sec.

12

2501.  Model municipal ordinance.

13

2502.  Local ordinance.

14

§ 2501.  Model municipal ordinance.

15

(a)  Purposes.--The purposes of this section are as follows:

16

(1)  To optimize the development and use of this

17

Commonwealth's oil and gas reserves by increasing reasonable

18

consistency in zoning and other municipal regulation.

19

(2)  To foster expeditious and efficient handling of

20

municipal oil and gas permitting procedures.

21

(3)  To allow municipalities to enact regulations under

22

the act of July 31, 1968 (P.L.805, No.247), known as the

23

Pennsylvania Municipalities Planning Code, and the act of

24

October 4, 1978 (P.L.851, No.166), known as the Flood Plain

25

Management Act, insofar as the regulation is authorized by

26

section 2502 (relating to local ordinance) and this section.

27

(b)  Authority.--The commission shall develop and adopt a

28

model ordinance to fulfill the purposes of this section.

29

(c)  Adoption of provisions.--

30

(1)  Within 120 days of the effective date of this

- 25 -

 


1

section, the commission shall, by majority vote, adopt a

2

model ordinance for counties and municipalities pertaining to

3

oil and gas drilling activities in accordance with the

4

Pennsylvania Municipalities Planning Code, as applicable, the

5

Flood Plain Management Act and this section.

6

(2)  The model zoning ordinance shall do all of the

7

following:

8

(i)  Authorize oil and gas development as a permitted

9

use by right in all zoning districts except residential

10

districts. The commission may develop a model zoning

11

ordinance that allows oil and gas development in

12

residential zoning districts by conditional use or

13

special exception with conditions dependent on the

14

density of existing uses within the district and the

15

isolation distances achievable in each residential

16

district.

17

(ii)  Authorize natural gas compression stations:

18

(A)  as a permitted use by right in all

19

agricultural, industrial and commercial districts;

20

and

21

(B)  as a conditional use in all other zoning

22

districts.

23

(iii)  Authorize natural gas processing plants:

24

(A)  as a permitted use by right in all

25

industrial districts; and

26

(B)  as a conditional use or special exception in

27

agricultural districts.

28

(3)  The model zoning ordinance shall not do any of the

29

following:

30

(i)  Impose limitations on the hours of operation on

- 26 -

 


1

drilling operations.

2

(ii)  Impose limitations on noise, light, height or

3

security or fencing on drilling operations, natural gas

4

compressor stations or natural gas processing plants if

5

the limitations are more stringent than limitations

6

imposed on construction activities for other similar land

7

uses. The model zoning ordinance may include limitations

8

on noise, light, height and security and fencing for

9

equipment or processes which are unique to the gas

10

industry and which are rational, nondiscriminatory and

11

reasonably defensible in the particular zone where they

12

apply.

13

(iii)  Have a permit review period for uses by right

14

that exceeds 30 days for complete and responsive

15

submissions.

16

(iv)  Impose restrictions on vehicular access routes

17

for overweight vehicles except as authorized under:

18

(A)  75 Pa.C.S. (relating to vehicles); or

19

(B)  the Pennsylvania Municipalities Planning

20

Code.

21

(v)  Regulate storm water, erosion and sedimentation

22

control or grading where the use is subject to regulation

23

by the department through an Erosion and Sedimentation

24

Control General Permit or similar permit.

25

(4)  Nothing in this subsection shall limit or preempt a

26

county or municipality from action pursuant to the act of

27

October 4, 1978 (P.L.864, No.167), known as the Storm Water

28

Management Act.

29

(d)  Effect of model ordinance.--An ordinance adopted by a

30

county or municipality to regulate oil and gas shall not contain

- 27 -

 


1

more stringent standards than the model ordinance adopted by the

2

commission.

3

(e)  Timing.--The commission shall publish the adopted model

4

ordinance in the Pennsylvania Bulletin immediately after its

5

adoption and shall disseminate information about the model

6

ordinance through the Department of Community and Economic

7

Development, municipal associations and other means as the

8

commission shall deem appropriate. The costs of the notification

9

shall be borne by the Department of Community and Economic

10

Development.

11

(f)  Miscellaneous.--The commission shall review the model

12

ordinance annually. Proposed amendments shall be published in

13

the Pennsylvania Bulletin within 30 days after their adoption.

14

(g)  Ordinance.--If an ordinance adopted by a county or

15

municipality contains more stringent standards than the model

16

ordinance, the county or municipality shall be ineligible to

17

receive funding under sections 2316 2312 (relating to local

<--

18

distribution of fee) and 2317 2313 (relating to environmental

<--

19

initiatives environmental initiatives distribution of fee).

<--

20

(h)  Effective date of model ordinance.--The model ordinance

21

shall take effect 70 days following the commission's publication

22

of the ordinance in the Pennsylvania Bulletin under this

23

section.

24

§ 2502.  Local ordinance.

25

Nothing in this chapter shall impair or infringe upon the

26

preemption or supersedure of the regulation of gas wells under

27

section 602 of the act of December 19, 1984 (P.L.1140, No.223),

28

known as the Oil and Gas Act.

29

Section 2.  This act shall take effect as follows:

30

(1)  This section shall take effect immediately.

- 28 -

 


1

(2)  The addition of 58 Pa.C.S. § 2501 shall take effect

2

immediately.

3

(3)  The remainder of this act shall take effect in 30

4

days.

- 29 -