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Half the $204M PA Impact Fee Revenue goes to Locals

October 22, 2012
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The Pennsylvania Public Utility Commission (PUC) last week said localities are to receive a total of $108.7 million from the impact fees enacted under Act 13, the state's omnibus Marcellus Shale law.

The PUC, empowered by Act 13 to collect revenue on behalf of local governments, said producers have so far paid $204.2 million into the state's Unconventional Well Fund. After $23 million went to various state agencies for their regulatory duties, 60% of the revenue goes to local governments and 40% to the Marcellus Legacy Fund. Thirty-five of Pennsylvania's 67 counties are to receive revenue, as well as 1,485 municipalities. Funds were withheld from four localities which are in legal battles with the state over zoning rules.

Last month the PUC reported that producers had paid most of the $205.9 million the agency estimated was owed under the impact fee (see NGI, Sept. 17).

"The Marcellus industry continues to create jobs and prosperity for our state's working families," Gov. Tom Corbett said. "We are excited and encouraged by this growth, but we know that every leap forward has an impact. That's why this impact fee is appropriate; millions of dollars will go directly to help the communities who need it."

Counties with producing unconventional wells would receive $38.2 million, or 36%, of the total revenue for local governments. Municipalities with producing unconventional wells would receive $39.3 million (37%), while municipalities that are contiguous or within five linear miles of municipalities with producing wells would divide $28.7 million (27%).

According to the PUC, Bradford County is to receive about $8.38 million, making it the highest recipient among counties with producing wells. Tioga County follows with $4.76 million, followed by Washington ($4.25 million), Lycoming ($3.93 million), Susquehanna ($3.9 million) and Greene ($3.1 million) counties.

Philadelphia County, an exact overlap of the City of Philadelphia, would have a $1.29 million disbursement from a Marcellus Legacy Fund. Allegheny County, where Pittsburgh is, would receive $1.04 million.

The windfall didn't please everyone in the state. The decision to withhold nearly $1 million in impact fee revenue from four townships amounted to extortion, said State Rep. Jesse White (D-Cecil), who opposed Act 13. White said the townships were being punished because they are locked in a legal battle with state over Act 13 zoning requirements.

"I don't know what's worse, the sorry and shameful hijacking and politicizing of the impact fee money, or the PUC's blatant disregard for the law," White said. "To withhold impact fee money intended for critical needs such as road improvements and public safety from these townships at the epicenter of Marcellus Shale drilling activity isn't just cruel, it's clearly punitive and illegal."

White's district includes Cecil, Mount Pleasant and Robinson townships in Washington County, and part of South Fayette Township in Allegheny County. All are plaintiffs are challenging the impact fee.

The PUC said disbursements to the four townships were being "withheld pending resolution of the requests for review [RFR] of existing ordinances." The agency has received RFRs for all four townships (see NGI, Sept. 24). PUC spokeswoman Jennifer Kocher said the agency is required to pay eligible localities by Dec. 1.

According to the PUC, Mount Pleasant Township is owed $511,855.78 in impact fee revenue; Cecil Township is to receive $246,098.00; Robinson Township $225,737.93; and South Fayette Township $2,731.39. All would receive revenue because of Marcellus operations.

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