THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

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

REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, MAY 16, 2011  

AN ACT

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

Statutes, imposing a natural gas impact fee and providing for

a model zoning ordinance.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Title 58 of the Pennsylvania Consolidated

Statutes is amended by adding a part to read:

PART I

UNCONVENTIONAL GAS WELLS

Chapter

23.  Impact Fee

25.  Model Ordinance

CHAPTER 23

IMPACT FEE

Sec.

2301.  Definitions.

2302.  Shale Impact Fee.

2303.  Administration.

2304.  Well information.

2305.  Duties of department.

2306.  Meters.

2307.  Commission.

2308.  Enforcement.

2309.  Criminal penalties.

2310.  Criminal grading.

2311.  Enforcement orders.

2312.  Administrative penalties.

2313.  Regulations.

2314.  Recordkeeping.

2315.  Examinations.

2316.  Local distribution of fee.

2317.  Statewide environmental initiatives.

§ 2301.  Definitions.

The following words and phrases when used in this chapter

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

context clearly indicates otherwise:

"Account."  The Shale Impact Account.

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

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

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

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

ending December 31.

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

liquids.

"Commission."  The Pennsylvania Public Utility Commission.

"Department."  The Department of Environmental Protection of

the Commonwealth.

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

governments, watershed organization, institution of higher

education, nonprofit organization, Pennsylvania Fish and Boat

Commission or an authorized organization as defined in 27

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

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

(relating to Shale Impact 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.

"Marginal gas well."  An unconventional gas well capable of

severing more than 60,000 cubic feet of gas per day during a

calendar month, but incapable of severing more than 90,000 cubic

feet of gas per day during a calendar month, including

production from the zones and multilateral well bores at a

single well, regardless of whether the production is metered

separately.

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

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

hydrocarbon gases, primarily methane, and possibly including

ethane, propane, butane, pentane, 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 in natural gas which are

separated from the gas as liquids through the process of

absorption, condensation, adsorption or other methods in gas

processing of cycling plants.

"Number of producing unconventional wells."  The most recent

numerical count of producing unconventional wells on the

inventory maintained and provided to the commission by the

department as of the last day of each month.

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

values used to compute the adjusted fee under section 2302

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

shall be determined as follows:

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

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

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

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

sum of the average annual price plus one.

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

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

sum of the average annual price plus two.

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

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

sum of the average annual price plus three.

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

greater than $8.00, the price adjustment factor shall be

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

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

company that holds a permit or other authorization to engage in

the business of severing natural gas for sale, profit or

commercial use from an unconventional well in this Commonwealth.

The term shall not include a producer that severs natural gas

from a site used to store natural gas that did not originate

from the site.

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

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

geological formation existing below the base of the Elk

Sandstone or its geologic equivalent stratigraphic interval

where oil or 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 by

using multilateral well bores or other techniques to expose more

of the formation of the well bore.

"Unit."

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

wellhead at a temperature of 60 degrees Fahrenheit and an

absolute pressure of 14.73 pounds per square inch in

accordance with American Gas Association Standards and

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

varying pressures with deviations as follows:

(i)  The average absolute atmospheric pressure shall

be assumed to be 14.4 pounds to the square inch,

regardless of elevation or location of point of delivery

above sea level or variations in atmospheric pressure

from time to time.

(ii)  The temperature of the gas passing the meters

shall be determined by the continuous use of a recording

thermometer installed to properly record the temperature

of 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 is installed and not operating

properly, an average flowing temperature of 60 degrees

Fahrenheit shall be used in computing gas volume.

(iii)  The specific gravity of the gas shall be

determined annually by tests made by the use of an

Edwards of Acme gravity balance, or at intervals as

necessary. Specific gravity determinations shall be used

in computing gas volumes.

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

Law shall be determined by annual tests or at other

shorter intervals as necessary. The apparatus and method

used in making the test shall be in accordance with

recommendations of the National Bureau of Standards or

Report No. 3 of the Gas Measurement Committee of the

American Gas Association. The results of the test shall

be used in computing the volume of gas delivered under

this chapter.

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

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

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

natural gas to one barrel of natural gas liquids.

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

a vertical linear bore and is not intentionally deviated from

the vertical.

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

values used to compute the adjusted fee under section 2302

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

shall be determined as follows:

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

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

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

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

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

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

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

360,000, the volume adjustment factor is 0.4.

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

750,000, the volume adjustment factor is 0.5.

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

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

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

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

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

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

§ 2302.  Shale Impact Fee.

(a)  Imposition.--Beginning January 1, 2010, there shall be

imposed a Shale Impact Fee on each unconventional well producing

gas in this Commonwealth.

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

each unconventional well subject to the following adjustments:

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

fee amount times the volume adjustment factor times the price

adjustment factor rounded to the nearest $100.

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

unconventional well is measured by a single wellhead meter,

the combined volumes of gas produced shall be divided by the

number of unconventional wells and each producer of an

unconventional well shall use this quotient in determining

its volume adjustment factor.

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

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

paragraph (1).

§ 2303.  Administration.

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

commission shall calculate and determine the average annual

price of natural gas for the previous calendar year.

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

provided to producers of unconventional wells and shall be

published on the commission's Internet website.

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

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

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

adjusted until a comparable method to determine the average

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

the base data of the NYMEX Henry Hub settled price is

substantially revised, the commission shall make appropriate

changes to ensure that the average annual price of natural gas

is reasonably consistent with the result that would have been

attained had the substantial revision not been made.

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

each producer shall submit a report and payment of the fee with

the commission on a form prescribed by the commission for the

previous calendar year. The report shall include the following:

(1)  Annual units of production severed by the producer

for each unconventional well for the reporting period.

(2)  The number of producing unconventional wells of a

producer in each county and municipality.

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

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

August 1, 2011, and the fee due shall be paid as follows:

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

2011.

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

1, 2011.

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

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

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

the commission on the reporting date.

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

thereafter, the commission shall determine the reasonable annual

cost to collect and distribute the fee in accordance with this

chapter and shall deduct that amount from the total amount of

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

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

amount of fees collected for 2010. Fees collected under this

section are hereby annually appropriated to the commission to

carry out its duties under this chapter.

§ 2304.  Well information.

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

a list of all unconventional wells that have received a drilling

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

monthly basis.

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

commission of the following within 30 days after a calendar

month in which the change occurs:

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

removal of a well from production.

(2)  The use of a different accredited laboratory to

issue a wellhead meter certification.

§ 2305.  Duties of department.

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

drill an unconventional well in this Commonwealth, the

department shall determine whether the producer has paid all

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

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

drill an unconventional well until all fees owed under section

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

§ 2306.  Meters.

A producer who drills an unconventional well in this

Commonwealth shall provide and maintain a wellhead meter at the

unconventional well that is tested, calibrated and maintained in

accordance with industry standards approved by the commission. A

wellhead meter installed after the effective date of this

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

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

Multiple wells located on the same drilling pad may utilize the

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

Impact Fee).

§ 2307.  Commission.

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

all inquiries and determinations necessary to calculate and

collect the fee imposed under this chapter, including, if

applicable, interest and penalties.

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

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

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

determination.

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

be sent to the producer at its registered address via certified

mail.

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

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

the report under section 2303(d) (relating to administration) is

filed.

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

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

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

§ 2308.  Enforcement.

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

delinquent fee at the rate prescribed under section 806 of the

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

Code.

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

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

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

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

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

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

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

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

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

commission shall send a written notice of the amount of the

deficiency to the producer within 30 days from the date of

determining the deficiency. If the producer has not provided a

complete and accurate statement of the volume of gas extracted

for the payment period, the commission may estimate the volume

in its deficiency notice.

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

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

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

collectible in the manner provided by law for the collection of

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

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

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

Commonwealth upon the property of the producer, but only after

the judgment has been entered and docketed of record by the

prothonotary of the county where the property is situated. The

Commonwealth may transmit to the prothonotaries of the

respective counties certified copies of the judgments, and it

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

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

requiring the payment of costs as a condition precedent to the

entry of the judgment.

§ 2309.  Criminal penalties.

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

to:

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

fraudulent report under this chapter with the intent to

defraud the Commonwealth.

(2)  Refuse to permit the commission or its authorized

agents to examine books, records or papers or hinder or

obstruct the commission in the performance of a duty under

this chapter.

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

swearing) or 4904 (relating to unsworn falsification to

authorities), including a violation in providing or preparing

information required by this chapter.

(4)  Intentionally fail to make timely payment of the

fee.

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

probable cause of a violation under this section exists, the

commission shall refer the case to the Attorney General for

investigation.

§ 2310.  Criminal grading.

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

a producer that willfully violates this chapter or an order

issued under this chapter commits a summary offense and shall,

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

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

for not more than 30 days, or both.

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

or subsequent violation of this chapter or an order of the

commission commits a misdemeanor and shall, upon conviction, be

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

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

period of not more than one year, or both.

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

each violation of this chapter or order issued under this

chapter shall constitute a separate offense under subsection (a)

or (b).

§ 2311.  Enforcement orders.

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

necessary to enforce this chapter. An order issued under this

section shall take effect upon notice, unless the order

specifies otherwise. An appeal of the order must be in

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

investigations and hearings).

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

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

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

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

contempt and shall be punished by the court in an appropriate

manner. The commission shall apply to the Commonwealth Court,

which shall have jurisdiction over matters relating to contempt.

§ 2312.  Administrative penalties.

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

authorized by law, the commission may assess a civil penalty

upon a producer for the violation of this chapter. In

determining the amount of the penalty, the commission shall

consider the willfulness of the violation and other relevant

factors.

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

and each violation of this chapter shall constitute a separate

offense.

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

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

proceedings), an action under this section must be brought

within three years of the violation.

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

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

hearings).

§ 2313.  Regulations.

The commission shall promulgate regulations necessary to

enforce this chapter.

§ 2314.  Recordkeeping.

A producer liable for the fee imposed under this chapter

shall keep records, make reports and comply with regulations of

the commission. If necessary, the commission may require a

producer to make reports, render statements or keep records as

the commission deems sufficient to determine liability for the

fee.

§ 2315.  Examinations.

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

representatives shall:

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

producer in order to verify the accuracy and completeness of

a report filed or fee paid under this chapter.

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

records for any period deemed proper not to exceed three

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

relate.

(3)  Examine any employee of a producer under oath

concerning the severing of natural gas subject to a fee or

any matter relating to the enforcement of this chapter.

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

and the attendance of all individuals who the commission

believes to have knowledge of relevant matters in accordance

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

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

the commission as a result of any report, examination,

investigation or hearing under this chapter shall be

confidential, except for official purposes, in accordance with

judicial order or as otherwise provided by law. An individual

unlawfully divulging the information commits a misdemeanor and

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

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

more than one year, or both.

§ 2316.  Local distribution of fee.

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

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

administered by the commission.

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

account.

(c)  Conservation districts.--

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

distributed to county conservation districts.

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

distributed to county conservation districts.

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

the account shall be distributed to county conservation

districts.

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

distributed in accordance with the following:

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

amount equally among conservation districts.

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

that divides the annual amount appropriated to each

county conservation district by the county from the

county general fund, special fund and grant sources by

the amount appropriated to county conservation districts

by counties from the county general fund, special fund

and grant sources and multiplying the resulting

percentage by the funds available.

(d)  Distribution.--Following distribution under subsection

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

appropriated for the purposes authorized under this section.

Local governments are encouraged, where appropriate, to jointly

fund projects that cross jurisdictional lines. The commission 

shall distribute the funds appropriated under this subsection as

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

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

in which producing unconventional gas wells are located. The

amount for each county shall be determined using a formula

that divides the number of producing unconventional gas wells

in the county by the number of producing unconventional gas

wells in this Commonwealth and multiplies the resulting

percentage by the amount available for distribution under

this paragraph.

(2)  Thirty-seven percent shall be distributed to

municipalities in which producing unconventional gas wells

are located. The amount for each municipality shall be

determined using a formula that divides the number of

producing unconventional gas wells in the municipality by the

number of producing unconventional gas wells in this

Commonwealth and multiplies the resulting percentage by the

amount available for distribution under this paragraph.

(3)  Twenty-seven percent shall be distributed to

municipalities located in a county in which producing

unconventional gas wells are located. The amount available

for distribution in each county shall be determined by

dividing the number of producing unconventional gas wells in

the county by the number of producing unconventional gas

wells in this Commonwealth and multiplying the resulting

percentage by the amount available for distribution under

this paragraph. The resulting amount available for

distribution in each county in which producing unconventional

gas wells are located shall be distributed to each

municipality in the county regardless of whether an

unconventional gas well is located in the municipality as

follows:

(i)  One-half shall be distributed to each

municipality using a formula that divides the population

of the municipality within the county by the total

population of the county and multiplies the resulting

percentage by the amount available for distribution to

the county under this subparagraph.

(ii)  One-half shall be distributed to each

municipality using a formula that divides the highway

mileage of the municipality within the county by the

total highway mileage of the county and multiplies the

resulting percentage by the amount available for

distribution to the county under this subparagraph.

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

under this subsection shall make use of funds received only for

the following purposes:

(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

police and fire 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)  Records management, geographic information systems

and information technology.

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

§ 2317.  Statewide environmental initiatives.

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

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

appropriated for distribution by the commission as follows:

(1)  Eighty percent to the Commonwealth Financing

Authority to be utilized for grants to eligible applicants

for the following purposes:

(i)  To implement acid mine drainage abatement and

cleanup efforts, mine reclamation and to plug abandoned

and orphaned oil and gas wells.

(ii)  Grants for watershed protection as defined in

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

(iii)  Planning and enforcement authorized under

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

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

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

construction, reconstruction, maintenance and repair.

(v)  The planning, acquisition, development,

rehabilitation and repair of greenways, recreational

trails, open space, natural areas, community conservation

and beautification projects, community and heritage parks

and forest conservation.

(vi)  Flood control and dam safety projects,

including the removal of dams where appropriate.

(2)  Ten percent to the Motor License Fund.

(3)  Ten percent to the Hazardous Sites Cleanup Fund.

(b)  Restriction on use of proceeds.--

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

for the purpose of public relations, outreach,

communications, lobbying or litigation.

(2)  No property purchased using revenue generated under

this section may be conveyed or resold to another entity

without approval from the Department of Conservation and

Natural Resources.

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

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

the authorized organization has obtained the written consent

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

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

the Department of Conservation and Natural Resources shall

review applications for funding as requested by the Commonwealth

Financing Authority and provide recommendations on priority of

projects and project approval for consideration by the

Commonwealth Financing Authority.

CHAPTER 25

MODEL ORDINANCE

Sec.

2501.  Model municipal ordinance.

2502.  Local ordinance.

§ 2501.  Model municipal ordinance.

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

(1)  To optimize the development and use of this

Commonwealth's oil and gas reserves by increasing reasonable

consistency in zoning and other municipal regulation.

(2)  To foster expeditious and efficient handling of

municipal oil and gas permitting procedures.

(3)  To allow municipalities to enact regulations under

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

Pennsylvania Municipalities Planning Code, and the act of

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

Management Act, insofar as the regulation is authorized by

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

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

model ordinance to fulfill the purposes of this section.

(c)  Adoption of provisions.--

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

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

model ordinance for counties and municipalities pertaining to

oil and gas drilling activities in accordance with the

Pennsylvania Municipalities Planning Code, as applicable, the

Flood Plain Management Act and this section.

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

following:

(i)  Authorize oil and gas development as a permitted

use by right in all zoning districts except residential

districts. The commission may develop a model zoning

ordinance that allows oil and gas development in

residential zoning districts by conditional use or

special exception with conditions dependent on the

density of existing uses within the district and the

isolation distances achievable in each residential

district.

(ii)  Authorize natural gas compression stations:

(A)  as a permitted use by right in all

agricultural, industrial and commercial districts;

and

(B)  as a conditional use in all other zoning

districts.

(iii)  Authorize natural gas processing plants:

(A)  as a permitted use by right in all

industrial districts; and

(B)  as a conditional use or special exception in

agricultural districts.

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

following:

(i)  Impose limitations on the hours of operation on

drilling operations.

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

security or fencing on drilling operations, natural gas

compressor stations or natural gas processing plants if

the limitations are more stringent than limitations

imposed on construction activities for other similar land

uses. The model zoning ordinance may include limitations

on noise, light, height and security and fencing for

equipment or processes which are unique to the gas

industry and which are rational, nondiscriminatory and

reasonably defensible in the particular zone where they

apply.

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

that exceeds 30 days for complete and responsive

submissions.

(iv)  Impose restrictions on vehicular access routes

for overweight vehicles except as authorized under:

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

(B)  the Pennsylvania Municipalities Planning

Code.

(v)  Regulate storm water, erosion and sedimentation

control or grading where the use is subject to regulation

by the department through an Erosion and Sedimentation

Control General Permit or similar permit.

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

county or municipality from action pursuant to the act of

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

Management Act.

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

county or municipality to regulate oil and gas shall not contain

more stringent standards than the model ordinance adopted by the

commission.

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

ordinance in the Pennsylvania Bulletin immediately after its

adoption and shall disseminate information about the model

ordinance through the Department of Community and Economic

Development, municipal associations and other means as the

commission shall deem appropriate. The costs of the notification

shall be borne by the Department of Community and Economic

Development.

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

ordinance annually. Proposed amendments shall be published in

the Pennsylvania Bulletin within 30 days after their adoption.

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

municipality contains more stringent standards than the model

ordinance, the county or municipality shall be ineligible to

receive funding under sections 2316 (relating to local

distribution of fee) and 2317 (relating to environmental

initiatives).

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

shall take effect 70 days following the commission's publication

of the ordinance in the Pennsylvania Bulletin under this

section.

§ 2502.  Local ordinance.

Nothing in this chapter shall impair or infringe upon the

preemption or supersedure of the regulation of gas wells under

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

known as the Oil and Gas Act.

Section 2.  This act shall take effect as follows:

(1)  This section shall take effect immediately.

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

immediately.

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

days.