White introduces local impact fee bill on natural gas extraction

HB 1748 would maintain local control while providing funding for infrastructure, environmental and education concerns

HARRISBURG, July 18 – State Rep. Jesse White, D-Washington/Allegheny/Beaver, has introduced HB 1748, legislation that would establish a local impact fee on natural gas extraction in Pennsylvania.

Under White’s legislation, an annual base fee of $20,000 would be assessed and subject to an adjustment based on the production volume and price of gas. His bill, the only impact fee legislation introduced by a Democratic lawmaker in either the House or Senate, would also establish an annual operation fee of $2,000 per unconventional natural gas well for the entire life of the well. The Pennsylvania Utility Commission would be responsible for the collection of the fee and distribution of the resulting revenues.

“My district is in the heart of Marcellus Shale development in Pennsylvania, and I support the economic growth created by the natural gas industry; however, we must do everything possible to ensure that this vital natural resource is developed responsibly and provides the necessary revenue to address any potential impacts, now and in the future,” White said. “My proposal provides necessary funding for local infrastructure needs, environmental concerns, and school funding, which will have the effect of providing property tax relief, all without putting a penny in the state’s General Fund and without forcing our municipalities to give up their local control over a critically important issue.”

Here is a video of White speaking on his legislation, courtesy of Comcast Newsmakers. Please note there is a minor error in the video- instead of giving a portion to the Motor Vehicle License Fund, it actually is designated for Growing Greener.

White emphasized that his bill eliminates the “local ordinance preemption” included in other legislation such as Senate President Pro Tempore Joe Scarnati’s S.B. 1100, which would require municipalities to adopt a statewide model ordinance promulgated by the Public Utility Commission in order to receive proceeds from the impact fee. White did not include the preemption at the request of local municipalities.

“While my proposal still prohibits municipalities that totally ban drilling from receiving any of the proceeds, we should not punish the municipalities that have worked long and hard to craft and pass reasonable ordinances that reflect the will of their community, while still permitting drilling to take place,” White said.

Under White’s proposal, the revenue would be distributed as follows:

60 percent of the revenue in the Shale Impact Account would be distributed to address local community impact:

• 37% would be distributed to host municipalities in which producing unconventional gas wells are located.
• 36% percent would be distributed to school districts located in counties in which producing unconventional wells are located.
• 27% percent would be distributed to non-host municipalities in a county in which producing unconventional wells are located.

40 percent of the revenue in the Shale Impact Account would be distributed by the PUC to statewide environmental initiatives:

• 80% to the Commonwealth Financing Authority to be utilized for grants to eligible applicants for the following purposes: to implement acid mine drainage abatement and cleanup efforts, mine reclamation and to plug abandoned and orphaned oil and gas wells; grants for watershed protection; planning and enforcement under the Pennsylvania Sewage Facilities Act; water, storm water and sewer systems, including construction, reconstruction, maintenance and repair; and 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; and Flood control and dam safety projects.
• 10% to Growing Greener.
• 10% to the Hazardous Sites Cleanup Fund.

Click here for an downloadable, one-page chart on White’s impact fee legislation. For the full text of HB 1748, click here.

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