Two Pennsylvania State senators said Wednesday they plan “in the near future” to cosponsor a bill that would prohibit the distribution of impact fees generated from natural gas development to any municipality that unreasonably limits or prohibits future development of natural gas within the municipality.
“The impact fee was carefully constructed to compensate municipalities that hosted or were in proximity to natural gas development for any impacts that may be experienced,” said State Sens. Camera Bartolotta (R-Beaver, Greene, and Washington Counties) and Gene Yaw (R-Bradford, Lycoming, Sullivan, Tioga, and Union Counties) in a memorandum posted Oct. 9.
“Impact fee dollars were never intended to go to municipalities that took unreasonable actions to prevent ongoing natural gas development within the municipality,” the memo said.
The lawmakers added that while municipalities may have some flexibility in how they zone or regulate oil and gas operations — provided they do not exceed limitations in state or federal law — doing so in an unreasonable manner that prevents future natural gas development should render the municipality ineligible for state collected and distributed impact fees.
The Pennsylvania Public Utility Commission (PUC) June 18 posted detailed information about this year’s distribution of impact fees on natural gas producers totaling upwards of $179.6 million.
The PUC said that starting in July, county and municipal governments directly affected by drilling would begin receiving a total of roughly $100.3 million for the 2023 reporting year and that another nearly $638 million will be transferred to the Marcellus Legacy Fund, which provides financial support for environmental, highway, water and sewer projects, rehabilitation of greenways, and other projects around the state.
Also, about $15.5 million will be distributed to state agencies, as specified by state law, the PUC said, adding that this year’s distribution is approximately $100 million less than last year, driven primarily by the average price of natural gas in 2023 ($2.74 per MMBtu) versus the average price in 2022 ($6.64 per MMBtu), which generated a lesser impact fee payment for each well in 2023 — along with the addition of only 423 new wells during 2023.
Bartolotta and Yaw said that their forthcoming “legislation prohibits such disbursement of impact fee funds by the PA PUC and further requires the PA PUC to hold any funds during the pendency of any litigation challenging the validity of a local zoning ordinance,” the memo states.