Bill Text: PA HB1865 | 2011-2012 | Regular Session | Introduced

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Bill Title: Providing for an unconventional well impact fee; establishing the Marcellus Shale Impact Fund and the Marcellus Shale Roadway Repair Account; and imposing penalties.

Spectrum: Moderate Partisan Bill (Republican 8-1)

Status: (Introduced - Dead) 2011-09-26 - Referred to ENVIRONMENTAL RESOURCES AND ENERGY [HB1865 Detail]

Download: Pennsylvania-2011-HB1865-Introduced.html

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PRINTER'S NO. 2402
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1865 Session of2011
INTRODUCED BY SCHRODER, CREIGHTON, GRELL, GROVE, HESS, MUSTIO, SACCONE AND SWANGER, SEPTEMBER 26, 2011
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, SEPTEMBER 26, 2011
AN ACT
Providing for an unconventional well impact fee; establishing
the Marcellus Shale Impact Fund and the Marcellus Shale
Roadway Repair Account; and imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the
Unconventional Well Impact Fee Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Account." The Marcellus Shale Roadway Repair Account.
"County." A county of the second A, third, fourth, fifth,
sixth, seventh or eighth class.
"Department." The Department of Environmental Protection of
the Commonwealth.
"Eligible environmental costs." The costs incurred by the
Commonwealth for remediating environmental impacts resulting
from natural gas production from unconventional wells. The term
includes costs incurred by the Commonwealth for remediating any
of the following resulting from natural gas production from
unconventional wells:
(1) Potable or nonpotable water contamination or
diminution.
(2) Erosion and sedimentation problems.
(3) Soil contamination.
(4) Hazardous material spills.
(5) Damages to plant or wildlife habitat beyond that
covered by an operator's drilling permit.
(6) Pipeline impacts.
(7) Any impact for which fines and penalties were
assessed to pay for remediation efforts.
"Eligible transportation costs." The costs incurred by the
Commonwealth or one of its municipalities for remediating
transportation impacts resulting from natural gas production
from unconventional wells. The term includes costs incurred by
the Commonwealth for remediating any of the following resulting
from natural gas production from unconventional wells:
(1) Roadway resurfacing.
(2) Roadway reconstruction.
(3) Roadway repair.
(4) Bridge reconstruction or repair.
(5) Traffic controls.
(6) Signage.
(7) Any transportation impacts remediated under the
Department of Transportation's road posting and bonding
program.
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"Fee." The unconventional well impact fee established under
section 3(a).
"Fund." The Marcellus Shale Impact Fund.
"Municipality." A county, city, borough, incorporated town
or township.
"Natural gas." A fossil fuel consisting of a mixture of
hydrocarbon gases, primarily including 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.
"Operator." A person who engages or continues within this
Commonwealth in the business of severing natural gas for sale,
profit or commercial use. The term does not include a person who
severs natural gas from a storage field.
"Pipeline impacts." Impacts such as leaks, explosions,
contaminations, erosion and sedimentation problems or damage to
public or private property resulting from the construction or
maintenance of pipelines, including gathering lines and
intrastate or interstate transmission lines.
"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
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of the formation of the well bore. The term includes wells for
which drilling activities have commenced or production
operations have begun.
Section 3. Unconventional well impact fee.
(a) Establishment.--Beginning January 30, 2012, and each
year thereafter, an operator shall pay a fee on each
unconventional well owned or operated.
(b) Calculation.--
(1) The department shall calculate the unconventional
well impact fee annually based on the formula under paragraph
(2).
(2) The department shall calculate the fee by using a
formula which adds the total eligible environmental costs
from the prior calendar year and the total eligible
transportation costs from the prior calendar year, as
determined by the Department of Transportation, divided by
the total number of unconventional wells operated within this
Commonwealth in the prior calendar year.
(3) Each county conservation district shall assess any
pipeline impacts and determine remediation costs to the
Commonwealth or its municipalities and to owners of real
property in the county and shall submit the remediation costs
to the department to be used in calculating the
unconventional well impact fee.
(4) Money collected as a result of the fee shall be
deposited into the fund.
(c) Plugged wells.--An operator shall not be required to pay
the fee on any unconventional wells in which production has
ceased and the unconventional well is plugged in accordance with
section 210 of the act of December 19, 1984 (P.L.1140, No.223),
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known as the Oil and Gas Act.
(d) Duties of municipalities.--On or before September 30 of
each year, municipalities shall submit a detailed list of
impacts to their respective transportation infrastructure,
including impacts to highways, roadways or bridges or other
transportation problems resulting from the drilling of
unconventional wells in the prior calendar year, to the
Department of Transportation to be used in calculating the fee
under subsection (b).
Section 4. Return and payment.
(a) General rule.--An operator shall file a certificate with
the department which shall include a list by municipality of the
total number of unconventional gas wells owned by the operator
for the reporting period of the previous year. The operator
shall submit the amount of the unconventional well impact fee
due at the time the certificate is submitted.
(b) Filing.--
(1) Except as provided under paragraph (2), the
certificate required under subsection (a) shall be filed with
the county in which the well is located within 30 days
following the end of a reporting period.
(2) The operator may submit the unconventional well
impact fee due on a quarterly basis on a schedule approved by
the department.
(c) Deadline.--The unconventional well impact fee shall be
due on the date prescribed under subsection (b) and shall be
delinquent if not remitted to the department by that date.
Section 5. Penalties.
(a) Untimely certificate.--An operator who willfully fails
to file a timely certificate shall be assessed an administrative
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fine equal to 100% of the unconventional gas well impact fee
liability required to be reported on the certificate.
(b) Fraudulent certificate.--Any operator, with intent to
defraud the Commonwealth, who willfully makes or causes to be
made a certificate required under this act which is false shall,
upon finding by the department, be ordered to pay an
administrative fine of not more than 100% of the liability.
(c) Fines and costs.--
(1) Except as provided under subsection (a), an operator
shall be ordered to pay a fine of not more than $50,000 and
costs of prosecution for any of the following:
(i) Willfully failing to timely remit the
unconventional gas well impact fee to the department.
(ii) Willfully failing or neglecting to timely file
a certificate or report required under this act.
(iii) Refusing to timely pay a penalty or interest
imposed or provided for under this act.
(iv) Willfully failing to preserve the operator's
books, papers and records as directed by the department.
(v) Refusing to permit the department or its
authorized agents to examine its books, records or
papers.
(vi) Knowingly making any incomplete, false or
fraudulent certificate or report required under this act.
(vii) Preventing or attempting to prevent the full
disclosure of the amount of the unconventional gas well
impact fee due.
(viii) Providing the department with a false
statement as to the payment of the unconventional gas
well impact fee with respect to any pertinent facts.
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(ix) Making, uttering or issuing a false or
fraudulent statement required under this act.
(2) The penalties imposed under this section shall be in
addition to other penalties imposed by law.
(3) All fines received by the department under this act
shall be deposited in the Environmental Stewardship Fund.
Section 6. Records.
(a) Recordkeeping.--
(1) Every operator liable for the collection and
remittance of the fee shall keep records, render statements,
file certificates and comply with department rules and
regulations.
(2) Whenever it is necessary, the department may require
an operator, by notice served upon the operator, to file
certificates, render statements or keep records as the
department deems sufficient to show whether the operator is
liable to pay the unconventional gas well impact fee.
(b) Records.--Every operator responsible for the submittal
of the fee shall maintain records, statements and other
instruments as the department may prescribe by regulation.
(c) Examinations.--The department or any of its authorized
agents may:
(1) Examine the books, papers and records of any
operator in order to verify the accuracy and completeness of
the unconventional gas well impact fee submitted or reported.
(2) Require the preservation of all books, papers and
records for any period deemed proper by it for five years
from the end of the calendar year to which the records
relate.
(3) Examine any operator, under oath, concerning any
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matter relating to the enforcement or administration of this
act and may compel the production of books, papers and
records and the attendance of all persons, whether as parties
or witnesses, whom it believes to have knowledge of relevant
matters.
(d) Duties of operators.--Every operator shall provide the
department or its agent with the means, facilities and
opportunity for examinations and investigations under this
section.
(e) Unauthorized disclosure.--
(1) Any information gained by the department as a result
of any certificate, examination, investigation, hearing or
verification required or authorized under this act shall be
confidential or in accordance with proper judicial order or
as otherwise provided by law.
(2) Any person who unlawfully divulges information
required to be kept confidential under this act shall, upon
conviction, be sentenced to pay a fine of not more than
$1,000 and costs of prosecution.
Section 7. Marcellus Shale Impact Fund.
The Marcellus Shale Impact Fund is established as a special
fund within the State Treasury. Except for section 5(c)(3), all
payments received by the department under this act shall be
deposited in the fund. Any unused money in the fund shall remain
in the fund and any interest earned by the fund shall remain in
the fund. The money in the fund shall only be used in accordance
with section 9.
Section 8. Marcellus Shale Roadway Repair Account.
The Marcellus Shale Roadway Repair Account is established as
a restricted account within the General Fund. Any unused money
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in the account shall remain in the account and any interest
earned by the account shall remain in the account. The money in
the account shall only be used in accordance with section 9(c).
Section 9. Allocations and transfers.
(a) Allocation.--An amount equal to the total eligible
environmental costs is allocated to the department to be used to
remediate any environmental impacts related to drilling
unconventional wells in this Commonwealth. A minimum of 5% of
the annual receipts shall remain in the fund for emergency
environmental impact remediation related to unconventional well
natural gas production. County conservation districts shall
assist the department in remediating pipeline impacts.
(b) Transfer.--On July 1 of each calendar year, the
Secretary of the Budget shall transfer an amount equal to the
total costs to the Commonwealth and its municipalities for
eligible transportation costs for the prior calendar year, as
determined by the Department of Transportation, from the fund to
the account.
(c) Grant program.--The Department of Transportation shall
make available a minimum of 25% of the funds in the account
through a grant program to counties and municipalities within
this Commonwealth for the maintenance and repair of highways,
roadways and bridges or transportation problems determined by
the Department of Transportation to have been impacted by or
caused by the process of drilling unconventional wells and may
use up to 70% of the account for maintenance and repair of
State-owned or interstate highways, roadways and bridges or
transportation problems determined by the Department of
Transportation to have been impacted by or caused by the process
of drilling unconventional wells. A minimum of 5% of the annual
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transfer under subsection (b) shall remain in the account for
emergency transportation impact remediation related to
unconventional wells natural gas production.
Section 10. Annual reports.
(a) Requirement.--On February 1 of each year, the department
and the Department of Transportation shall each submit to the
Governor and the General Assembly an annual report of projects
and services provided by money from the fund for the prior year.
The annual report shall include the following:
(1) The total amount in the fund and the account.
(2) The total amount expended from the fund and the
account.
(3) The location and description of each project.
(4) The total project costs.
(b) Internet.--Each department shall publish and maintain
the annual report on its publicly accessible Internet website.
The annual reports required under this section may be submitted
to the Governor and the General Assembly by electronic mail.
Section 11. Regulations.
The department and the Department of Transportation are
authorized to promulgate regulations to effectuate the
provisions of this act.
Section 12. Expiration.
(a) Notice.--The Secretary of the Commonwealth shall, upon
the effective date of an act authorizing a severance tax on each
unconventional well producing gas in this Commonwealth, submit
for publication in the Pennsylvania Bulletin notice of that
fact.
(b) Date.--This act shall expire on the date of the
publication of the notice under subsection (a).
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Section 40. Effective date.
This act shall take effect in 60 days.
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