What's Inside The New Senate Impact Fee?

Pennsylvania’s Senate will vote on its leadership-sponsored impact fee this afternoon or evening, but after being amended in committee last night, the legislation looks much different than the bill we’ve been covering since it was introduced in May.
What’s in the new bill? A 20-year impact fee that begins at $50,000-per-well. It drops to $40,000 in year two, and then $30,000 in year three. From the fourth through tenth years of a well’s production, the driller pays $20,000. The fee drops to $10,000 annually from years 11 through 20.
Unlike the Corbett-backed House Impact Fee, which is being debated on the other side of the Capitol right this moment, the Senate bill imposes and collects the levy at the state level. The legislation’s fiscal note estimates a $94 million haul in 2011. That expands to $154 million in 2012, and gradually increases to $295 million in revenue by 2015.
Where does the money go? 55 percent of it would stay at the local level. That’s a lower chunk than  the House measure, which keeps ¾ of revenue at the county and municipal level. Under the new Senate bill, counties keep 36 percent of the local revenue. Municipalities hosting wells – or “host municipalities,” as they’re labeled in the legislation, would see 37 percent of the money. The remaining 27 percent of the local share would be divided among all municipalities within a drilling county.
Like every other impact fee sponsored by Republican leaders, the new bill doesn’t distribute any fee revenue to counties without Marcellus Shale drilling.
That being said, nearly half of the fee revenue under the amended bill would go to statewide efforts. Conservation districts would see $5 million in revenue each year – though only half that total in 2011 – and the Fire Commissioner’s Office and Fish and Boat Commission would receive $1.5 million annually.
Here’s how Pennsylvania’s 45 percent share of the impact fee would be split:

• 25 percent would go toward acid mine drainage cleanup, plugging abandoned wells, sewage treatment projects, and developing greenways. This money would be funneled through the Commonwealth Financing Agency.
• 25 percent for highway bridge improvement
• 25 percent for water and sewer projects
• 5 percent for hazardous site cleanup efforts
• 15 percent for “green” development like recreational trails and parks
• 5 percent for natural gas development, through the Department of Community and Economic Development

 
Moving on to local zoning: the new bill splits the difference between the House measure’s preemption of all local drilling regulations, and the Senate measure’s old “model ordinance” format, which would set a statewide standard for municipal regulations. The amended version lets townships and boroughs set their own drilling regulations, as long as the restrictions are in line with zoning for other types of construction and manufacturing sites.
If a driller views a municipalities’ zoning as unreasonable, it can appeal to the Attorney General. And if the AG agrees, the local government wouldn’t receive any impact fee money.

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