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Pennsylvania’s Impact Fee To Generate More Than $200 Million

The PUC has reported that Pennsylvania collected $197 million to date in impact fee revenue resulting from Act 13, and will take in nearly $206 million, when all 58 companies meet their payments.

Of the $8 million in unpaid fees, 17 companies have not submitted payments, along with fees for well drilled by the other 41 companies that they contest are not subject to the fee. The companies contend their wells do not produce the minimum fee threshold of 90,000 cubic feet of gas each day, and the PUC has insisted the companies prove that they are not meeting production levels. The PUC said it will distribute funds to state agencies and local governments by December 1. Bradford County will receive the largest single amount of county revenue from wells, totaling more than $10.5 million.

The $206 million figure is more than originally anticipated with passage of the Act, and reflects payments for wells drilled in 2011.  Under Act 13, the impact fee was enacted instead of a severance tax, and is charged on a sliding scale according to age of the well and the market price of natural gas. Under the law 60 percent of the revenue after administrative costs will be returned counties and municipalities; the rest will fund statewide initiatives including the repair of roads and bridges.

Payment schedules will not be affected by the fact that the Commonwealth Court invalidated sections of Act 13, which established the fee. The court ruled the section of the law restricting local governments’ ability to zone and regulate drilling was unconstitutional, but let the rest of the legislation stand.

Marcellus Shale Coalition president Kathryn Klaber referenced the dispute in her statement, saying natural gas drilling is giving state and local government “much-needed revenues for critical services,” but that the payments “[serve] as a stark reminder that we must ensure that we have common sense policies in place, especially local zoning uniformity at the center of Act 13, which encourage economic growth, job creation and additional revenue.”

The state Supreme Court has scheduled a hearing on Act 13 for October 17.