Regular Session 2021-2022 House Bill 2444 P.N. 2860

PRINTER'S NO. 2860

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

2444

Session of

2022

INTRODUCED BY GROVE, SMITH, STAMBAUGH, GLEIM, RYAN, COOK,

ROTHMAN, M. MACKENZIE, SCHMITT, GREINER, O'NEAL, OBERLANDER,

HAMM, MILLARD, MIHALEK, PICKETT, MOUL, FEE, R. MACKENZIE,

HICKERNELL, SAYLOR, ROWE, MENTZER, BURNS, KEEFER, STRUZZI,

FARRY, BERNSTINE, DAVANZO AND HERSHEY, MARCH 23, 2022

REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,

MARCH 23, 2022

AN ACT

Amending the act of April 9, 1929 (P.L.177, No.175), entitled

"An act providing for and reorganizing the conduct of the

executive and administrative work of the Commonwealth by the

Executive Department thereof and the administrative

departments, boards, commissions, and officers thereof,

including the boards of trustees of State Normal Schools, or

Teachers Colleges; abolishing, creating, reorganizing or

authorizing the reorganization of certain administrative

departments, boards, and commissions; defining the powers and

duties of the Governor and other executive and administrative

officers, and of the several administrative departments,

boards, commissions, and officers; fixing the salaries of the

Governor, Lieutenant Governor, and certain other executive

and administrative officers; providing for the appointment of

certain administrative officers, and of all deputies and

other assistants and employes in certain departments, boards,

and commissions; providing for judicial administration; and

prescribing the manner in which the number and compensation

of the deputies and all other assistants and employes of

certain departments, boards and commissions shall be

determined," further providing for drilling and natural gas;

and establishing the Natural Gas Pipeline Development Program

and the Natural Gas Pipeline Development Fund.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The act of April 9, 1929 (P.L.177, No.175), known

as The Administrative Code of 1929, is amended by adding an

article to read:

ARTICLE XIX-C

DRILLING AND NATURAL GAS

(a) Subsurface Drilling

Section 1901-C. Definitions.

The following words and phrases when used in this subarticle

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

context clearly indicates otherwise:

"Company." An entity doing business within this Commonwealth

and subject to tax under Article III, IV or VI of the act of

March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

1971.

"Department." The Department of Conservation and Natural

Resources of the Commonwealth.

"Secretary." The Secretary of Conservation and Natural

Resources of the Commonwealth.

Section 1902-C. Subsurface drilling under Commonwealth lands.

(a) Program established.--The department shall establish a

program to review submissions or nominations by companies for

the potential leasing of subsurface rights under State forest

and park property by companies for oil and gas development from

subsurface drilling originating from well sites outside the

State forest or park property.

(b) Determination.--

(1) The secretary shall have exclusive authority to

approve or disapprove a lease under this subarticle.

(2) If the secretary disapproves a lease under this

article to a company, the secretary shall provide to the

company, in writing, the reason for the disapproval.

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(1) Following the disapproval of a lease under this

subarticle, a company may resubmit a lease to the department

after the company has reasonably attempted to meet the

conditions for the secretary's approval.

(2) A lease shall be considered approved upon the

company's fourth resubmission and subsequent disapproval.

Section 1903-C. Revenue.

Revenue generated from leases under section 1902-C shall be

deposited by the secretary into the Oil and Gas Lease Fund.

Section 1904-C. Construction.

Nothing in this subarticle shall be construed to modify

existing authority that the department has to consider the

leasing of oil, natural gas drilling or other mineral rights

owned by the Commonwealth that underlie State forest and park

property or other lands managed by the department.

(b) Natural Gas Pipeline Development

Program and Fund

Section 1911-C. Definitions.

The following words and phrases when used in this subarticle

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

context clearly indicates otherwise:

"Authority." The Commonwealth Financing Authority.

"Eligible applicant." A company as defined in section 1901-C

whose goal is to increase the access of natural gas to domestic

markets.

"Fund." The Natural Gas Pipeline Development Fund

established under section 1913-C.

"Program." The Natural Gas Pipeline Development Program

established under section 1912-C.

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Section 1912-C. Program.

(a) Establishment and purpose.--The Natural Gas Pipeline

Development Program is established to fund projects in

accordance with this subarticle.

(b) Administration.--The authority shall administer the

program and provide grants under the program in accordance with

the section.

(1) Money in the fund may be utilized by the authority

for competitive grants to eligible applicants for eligible

projects as provided in this subarticle.

(2) To be eligible to receive a grant under the program,

an eligible applicant must provide or demonstrate to the

authority one or more of the following:

(i) A plan to expand access to natural gas

infrastructure, while limiting environmental impacts and

protecting public lands.

(ii) A plan to expand access to natural gas across

this Commonwealth.

(iii) A plan to accelerate the rate of

infrastructure placement and replacement necessary to

advance the purposes of this subarticle.

(iv) A plan to promote the use of natural gas.

(v) A plan to provide rebates or buy down

expenditures to reduce upfront costs associated with

connecting to a natural gas line, in-house piping and

natural gas equipment owned by new or existing customers,

including high efficiency natural gas furnaces.

(d) Application.--

(1) An eligible applicant seeking a grant under the

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program shall submit an application, including supporting

information, as required by the authority.

(2) The application shall include:

(i) The name, address, telephone number and other

contact information of the eligible applicant.

(ii) The purpose for which the grant will be used,

in accordance with subsection (c)(2).

(iii) The cost of the proposed project and the

amount sought for the grant.

(iv) Any other information deemed necessary by the

authority.

(3) The authority shall establish application deadlines

regarding grants under the program.

(e) Project review.--

(1) The authority shall review and prepare an assessment

of each application and determine which projects will best

utilize and promote the use of domestically produced natural

gas in this Commonwealth.

(2) The authority's review and assessment shall consider

the following:

(i) The economic impact of the project included in

the application.

(ii) The number of new end users that will gain

access to natural gas as a result of the project.

(iii) The extent to which the project extends access

to natural gas to serve an unserved or underserved area

of this Commonwealth.

(iv) The extent to which the project will make the

use of natural gas more efficient and affordable to

customers.

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(v) The projected cost of the project.

(vi) The source and amount of any money to be

contributed by the eligible applicant.

(vii) Any other relevant factors as determined by

the authority.

(3) The authority shall give priority to applications

that will result in maximizing the delivery of natural gas

from this Commonwealth to domestic markets.

(f) Notice.--

(1) The authority shall transmit notice of the

application and application deadlines to the Legislative

Reference Bureau for publication in the Pennsylvania

Bulletin.

(2) The application and application deadlines shall be

posted on the publicly accessible Internet website of the

authority.

(g) Approval schedule.--The authority shall develop a

schedule for the approval of applications under this section.

(h) Reapplication.--If an application is not approved under

this section, the eligible applicant may revise and resubmit the

application and plan for approval.

(i) Amount of grant.--A grant under the program shall be

limited to the lesser of:

(1) 50% of the cost of the proposed project; or

(2) $3,000,000.

(j) Guidelines.--The authority shall develop any necessary

guidelines regarding the award of grants under the program.

Section 1913-C. Fund.

(a) Establishment.--The Natural Gas Pipeline Development

Fund is established in the State Treasury.

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(b) Purpose.--Revenue generated from the leases under

section 1902-C shall be deposited into the fund to provide

grants under the program.

transferred from the Oil and Gas Lease Fund to the fund.

(d) Unused money.--Any unused portion of money in the fund

may be carried over and approved in future fiscal years.

Section 1914-C. Reports.

(a) Requirement.--By October 1, 2023, and each October 1

thereafter, the commission shall prepare an annual report

regarding the program and fund.

(b) Contents.--Each annual report under this section shall

include:

(1) A list of all grants approved during the previous

fiscal year, including the amount of the grant and a

description of each approved project.

(2) The estimated natural gas optimization benefits to

date for all projects receiving funding during the fiscal

year and the methods used to determine estimated benefits.

shall be transmitted to:

(1) The chairperson and minority chairperson of the

Consumer Protection and Professional Licensure Committee of

the Senate.

(2) The chairperson and minority chairperson of the

Consumer Affairs Committee of the House of Representatives.

(d) Posting.--Each annual report under this section shall be

posted and maintained on the publicly accessible Internet

website of the commission.

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Section 1921-C. Definitions.

The following words and phrases when used in this subarticle

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

context clearly indicates otherwise:

"Department." The Department of Environmental Protection of

the Commonwealth.

"Permit." A written authorization issued by the department

or an authorization under a delegated agreement by the

department to engage in a regulated activity, including a new

permit, permit renewal, permit amendment, permit modification,

permit transfer, change of ownership, plan approval or

registration under a general permit. The term does not include a

certification or license.

"Permit application." The document submitted to the

department by an applicant that, if approved, grants a permit to

an applicant.

"Permit decision." The issuance or denial of a permit.

"Permit decision delay." The failure of the department to

issue a permit decision within:

(1) the time period specified by statute or regulation

or by the relevant time period established under 4 Pa. Code

Ch. 7a Subch. H (relating to permit decision guarantee for

the Department of Environmental Protection); or

(2) thirty days after the submission of a permit

application or request for plan approval or other

authorization when no time period is specified by statute,

regulation or 4 Pa. Code Ch. 7a Subch. H.

Section 1922-C. Initial review by department.

Within 30 days after the effective date of this section, the

department shall review all permit decisions and permit decision

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delays during the immediately prior calendar year and submit a

report of findings to the chairperson and minority chairperson

of the Environmental Resources and Energy Committee of the

Senate and the chairperson and minority chairperson of the

Environmental Resources and Energy Committee of the House of

Representatives.

(d) Unconventional Gas Wells

Section 1931-C. Definitions.

The following words and phrases when used in this subarticle

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

context clearly indicates otherwise:

"Applicable time period established for review." As follows:

(1) For a well permit required under 58 Pa.C.S. §

3211(e) (relating to well permits), within:

(i) forty-five calendar days of submission; or

(ii) sixty calendar days of submission if the review

period has been extended for cause.

(2) For a general air quality permit, within 30 calendar

days of submission.

(3) For an earth disturbance permit as required under 25

Pa. Code § 102.5 (relating to permit requirements), within:

(i) fifty-three business days of submission; or

(ii) twenty-four business days of submission for an

expedited application.

"Department." The Department of Environmental Protection of

the Commonwealth.

Section 1932-C. Issuance of permit.

(a) Operations.--Notwithstanding any other provision of law,

a permit application to undertake an activity related to

unconventional oil and gas development which has not been denied

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by the department within the applicable time period established

for review shall be deemed approved. The following apply:

(1) If the review period for the permit has been

extended for cause, the department shall provide a refund of

the fee to the applicant.

(2) If the department has notified the person of

deficiencies with the application, the period of time from

the date of the receipt of the deficiencies to the date of

the receipt of the person's response shall toll the

applicable time period established for review.

(3) Only two tolling periods shall be authorized.

(b) Construction.--Nothing under this section shall be

construed to relieve a person who commences activity under this

section from complying with each law pertaining to the activity

for which the permit is sought.

(e) Consistency and Uniformity

Section 1941-C. Definitions.

The following words and phrases when used in this subarticle

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

context clearly indicates otherwise:

"Department." The Department of Environmental Protection of

the Commonwealth.

Section 1942-C. Effect of permit by department.

(a) Local ordinances and enactments.--To maintain

consistency and uniformity of the regulation of standards for

natural resources and environmental protection throughout this

Commonwealth, when a permit is required from the department to

conduct a regulated activity within this Commonwealth and the

department issues the permit, the provisions of the permit shall

supersede all local ordinances and enactments purporting to

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establish standards for natural resources and environmental

protection which are in conflict with the department's

regulatory oversight of an activity or the laws and regulations

of this Commonwealth.

(b) Preemption.--This section preempts the regulation of all

local ordinances and enactments which set standards for natural

resource and environmental protection in activities for which

permits have been issued or are issued by the department.

(f) Carbon Dioxide Cap and Trade Authorization

Section 1951-C. Declaration of policy.

The General Assembly finds and declares as follows:

(1) As a matter of Pennsylvania law, no statutory or

constitutional authority currently exists that authorizes a

State agency to regulate or impose a tax on carbon dioxide

emissions. Therefore, it is the responsibility of the General

Assembly, working together with the Department of

Environmental Protection, the Environmental Quality Board,

the Pennsylvania Public Utility Commission and other

important stakeholders, to determine whether and how to

regulate or impose a tax on carbon dioxide emissions.

(2) The General Assembly recognizes that no statute,

including the act of January 8, 1960 (1959 P.L.2119, No.787),

known as the Air Pollution Control Act, the act of February

17, 1972 (P.L.64, No.20), known as the Uniform Interstate Air

Pollution Agreements Act, the act of July 9, 2008 (P.L.935,

No.70), known as the Pennsylvania Climate Change Act, or the

Pennsylvania Constitution, authorizes the Governor, the

Environmental Quality Board, the Department of Environmental

Protection or any other agency or official to adopt

regulations, implement a policy or take any other action to

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authorize the Commonwealth to join or participate in a State

or regional greenhouse gas cap-and-trade program or establish

a greenhouse gas cap-and-trade program.

(3) Affordable, reliable and resilient sources of

electric power generated in Pennsylvania are vital to the

health, safety and welfare of this Commonwealth's residents

and to the prosperity of its economy.

(4) The premature deactivation or retirement of coal-

fired and coal refuse electric generation units in

Pennsylvania as a direct result of State action will result

in significant direct economic hardship to the communities in

which they operate and will adversely affect this

Commonwealth's economy, environment and electric reliability

and the general health, safety and welfare of this

Commonwealth's residents, businesses and industries.

(5) Given that Pennsylvania is one of the top net

exporters of electricity and the third largest coal-producing

state in the nation, abating, controlling or limiting carbon

dioxide emissions will have a significant, profound and long-

lasting impact on this Commonwealth's economy and require its

consumers to import electricity generated by out-of-State

fossil fuel plants, canceling out any emission reductions.

(6) In addition to the impact on coal-fired and coal

refuse electric generating facilities, as well as natural

gas-fired electric generation facilities that would have to

absorb a carbon tax, abating, controlling or limiting carbon

dioxide emissions in Pennsylvania will have a significant

negative economic impact on this Commonwealth's industrial,

manufacturing and transportation sectors.

Section 1952-C. Definitions.

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The following words and phrases when used in this subarticle

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

context clearly indicates otherwise:

"Department." The Department of Environmental Protection of

the Commonwealth.

"RGGI." The Regional Greenhouse Gas Initiative, which is a

multistate compact that establishes or calls for the compacting

states to establish a regional, multistate cap on the amount of

greenhouse gases released by electric generation plants.

"Standing committee." Any of the following:

(1) The Environmental Resources and Energy Committee of

the Senate.

(2) The Environmental Resources and Energy Committee of

the House of Representatives.

Section 1953-C. Regulation of greenhouse gas emissions.

(a) Prohibition.--Except for a measure that is required by

Federal law, the department may not adopt a measure or take any

other action that is designed to abate, control or limit carbon

dioxide emissions, including an action to join or participate in

a State or regional greenhouse gas cap-and-trade program,

including the RGGI, nor may the department establish a

greenhouse gas cap-and-trade program, unless the General

Assembly specifically authorizes such a measure or action by

statute that is enacted on or after the effective date of this

section.

(b) Submission to General Assembly.--If the department

proposes a measure of action under subsection (a), the

department shall submit the proposed measure or other proposed

action to the General Assembly as provided under section 1954-C.

Section 1954-C. Process for submission to General Assembly.

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(a) Duties of department.--Prior to submitting a proposed

measure or other proposed action to the General Assembly under

section 1953-C(b), the department shall do the following:

(1) Submit to the Legislative Reference Bureau for

publication in the Pennsylvania Bulletin the proposed measure

or other proposed action that is in the form of draft

legislation. The publication shall set a public comment

period of no less than 180 days.

(2) During the public comment period, the department

shall conduct a minimum of four public hearings, conducted in

accordance with 65 Pa.C.S. Ch. 7 (relating to open meetings),

on the proposed measure or other proposed action and shall

conduct the hearings in geographically dispersed locations in

this Commonwealth, including locations in which regulated

sources of carbon dioxide emissions would be directly

economically affected by the proposal.

(3) Following the public comment period, the department

shall compile a report that will be submitted to each

standing committee. The report shall include the following

information:

(i) A list of all individual facilities, by county,

that would be subject to the proposed measure or other

proposed action, along with:

(A) The amount of carbon dioxide emitted by each

of the facilities.

(B) The estimated cost that each of the

facilities would incur to comply with the proposed

measure or other proposed action.

other proposed action would have on the price of

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electricity ($/MWh net) that each of the facilities

generates.

(D) A list of the facilities that, under the

proposed measure or other proposed action, would be

unlikely to continue to operate.

(E) For the other electric generation

facilities, an assessment of the extent to which they

would be likely to operate after the proposed measure

or other proposed action had been fully implemented.

(F) An assessment of the decrease of electricity

that would be exported from Pennsylvania after the

proposed measure or other proposed action had been

fully implemented.

(G) An assessment of the contribution to

resilience and diversity in the Pennsylvania electric

generation fleet from each of the affected facilities

and the impacts upon the resilience and diversity if

any or all of the facilities are forced to close.

(ii) A summary of the impacts on all industries

whose public testimony or comments were received by the

department during the public comment period.

(iii) An estimate of the net carbon dioxide emission

reductions that the proposed measure or other proposed

action would engender within the PJM Interconnection

region, taking into account the electricity generation in

neighboring states where there is not a regulation or tax

on carbon dioxide emissions.

(iv) A summary and justification of any provisions

in the proposed measure or other proposed action that

would address leakage.

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(v) A description of the economic and fiscal impacts

that would result from the proposed measure or other

proposed action, including the following impacts:

(A) Direct and indirect costs to the

Commonwealth and its political subdivisions and the

private sector.

(B) The impact of any action or measure upon the

wholesale and retail price of electricity, both

directly and indirectly, broken down by classes of

electricity consumers, including residential,

commercial, industrial and transportation.

services, productivity or competition.

(D) The nature of the reports, forms or other

paperwork that would be required for implementation

and administration of the action or measure and the

estimated cost for individuals, businesses and

organizations in the public and private sectors to

prepare them.

(E) The nature and estimated cost of legal,

consulting or accounting services that the public or

private sector would be required or likely to incur

for implementation and administration of the action

or measure.

(F) The impact that it would have on the public

interest to exempt individuals, employers or

facilities from compliance or require the

individuals, employers or facilities to comply with

less stringent standards when it would be lawful,

desirable and feasible.

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(vi) Whether a less costly or less intrusive

alternative method of achieving the goal of the proposed

measure or other proposed action has been considered for

an employer or facility that would otherwise be subject

to the proposed measure or proposed action.

(b) Legislation.--Once the public comment period has

concluded and the department has submitted the report to each of

the standing committees, the department shall submit the measure

in legislative form to each of the standing committees and

request that a member of each of the standing committees

introduce the legislation. This action shall constitute

submitting the measure or action to the General Assembly. If the

legislation is introduced, the legislation shall follow the

standard legislative process and may be considered by a standing

committee if the legislation is referred to the standing

committee.

Section 2. This act shall take effect as follows:

(1) The following shall take effect immediately:

(i) This section.

(ii) The addition of subarticles (b) and (f) of

Article XIX-C of the act.

(2) The remainder of this act shall take effect in 60

days.

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