Text Box: Marcellus Shale
Impact Fee Proposal
House Bill 1950
Fall 2011
Rep. Brian Ellis, sponsor




Overview: Counties may implement a local impact fee on unconventional well drilling to be collected and distributed at the county level.


Impact Fee Schedule (not to exceed)

Year 1:  $40,000

Year 2:  $30,000

Year 3:  $20,000

Year 4:  $10,000

Year 5:  $10,000                                                                  

Year 6:  $10,000

Year 7:  $10,000

Year 8:  $10,000

Year 9:  $10,000

Year 10: $10,000


Local Distribution

·         75% to host counties and their municipalities.

·         25% to restricted account in the General Fund.

·         Any money remaining in the restricted account after the distribution of the fees shall be distributed to the Department of Transportation.

·         Language enumerates acceptable uses of the funds by counties and municipalities.


Environmental Funds

Source:  Oil and Gas Lease Fund

The General Assembly created the Oil and Gas Lease Fund in 1955, taking the money from the sale of nonrenewable oil and gas resources owned by the state and reinvesting this money into public conservation assets benefiting all Pennsylvanians.  Historically, this fund averaged $3 million to $5 million a year before the Marcellus drilling boom. However, the Marcellus Shale boom was not realized at the time of the creation of this fund.  Revenue from the increase in the number of Marcellus Shale leases is up and conservatively estimated to generate $250-$500 million in royalties annually in the coming years.



Dedicate a portion of the Oil and Gas Lease Fund to environmental programs.


July 1, 2013 and Each Fiscal Year Thereafter

·         $15 million to conservation districts.

·         25% of total received funds of the prior fiscal year to the Environmental Stewardship Fund.

·         5% up to $5 million for payment in lieu of taxes (communities w/ State Forest land).


July 1, 2014 and Each Fiscal Year Thereafter

·         $40 million to the Hazardous Site Clean Up Fund. This transfer will be updated annually based on the CPI (inflation rate).

o   The HSCF currently receives $40 Million annually from the Capital Stock and Franchise Tax. The tax is set to expire January 2014.


Other Proposal Provisions

·         Under this proposal, unconventional vertical wells are assessed a fee of no more than 25% of the fee established by the local ordinance.


·         Includes full pre-emption for all local ordinances.


·         Prohibits the well impact fee costs from being passed on to the property owner or leaseholder.


·         Provides exemptions from the fee for: 1) Shallow wells above the Elk Sandstone (non-Marcellus wells); and 2) Wells that produce an average of less than 90,000 cubic feet of gas a day over a reporting period.


·         The Auditor General may audit a county’s and municipality’s expenditures of the funds received from an imposed impact fee.


·         Each county collecting an impact fee must submit a report detailing the expenditure of the funds collected to the House of Representatives and Senate.