OIL AND GAS (58 PA.C.S.) - OMNIBUS AMENDMENTS Cl. 58

Session of 2012

No. 2012-13

HB 1950

AN ACT

Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, providing for an unconventional gas well fee and for transfers from the Oil and Gas Lease Fund; providing for distribution of fees and transfers; establishing the Natural Gas Energy Development Program; consolidating the Oil and Gas Act with modifications and additions relating to definitions, well permits, permit objections, comments by municipalities and storage operators, well location restrictions, well site restoration, protection of water supplies, notification to public drinking water systems, containment for unconventional wells, transportation records regarding wastewater fluids, corrosion control requirements, gathering lines, well control emergency response, hydraulic fracturing chemical discharge requirements, bonding, air containment emissions, public nuisances, enforcement orders, well control emergency cost recovery, penalties, civil penalties, inspection and production of materials, witnesses, depositions and rights of entry, third party liability and inspection reports; providing for local ordinances relating to oil and gas operations and for responsibility for fee; making an appropriation; and making a related repeal.

The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

Section 1. Title 58 of the Pennsylvania Consolidated Statutes is amended by adding parts to read:

PART I

(Reserved)

PART II

OVERSIGHT AND DEVELOPMENT

Chapter

23. Unconventional Gas Well Fee

25. Oil and Gas Lease Fund

27. Natural Gas Energy Development Program

CHAPTER 23

UNCONVENTIONAL GAS WELL FEE

Sec.

2301. Definitions.

2302. Unconventional gas well fee.

2303. Administration.

2304. Well information.

2305. Duties of department.

2306. (Reserved).

2307. Commission.

2308. Enforcement.

2309. Enforcement orders.

2310. Administrative penalties.

2311. (Reserved).

2312. Recordkeeping.

2313. Examinations.

2314. Distribution of fee.

2315. Statewide initiatives.

2316. Small business participation.

2317. Applicability.

2318. Expiration.

§ 2301. Definitions.

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Average annual price of natural gas." The arithmetic mean of the New York Mercantile Exchange (NYMEX) settled price for the near-month contract, as reported by the Wall Street Journal for the last trading day of each month of a calendar year for the 12-month period ending December 31.

"Company." An entity doing business within this Commonwealth and subject to tax under Article III, IV or VI of the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.

"Commission." The Pennsylvania Public Utility Commission.

"Department." The Department of Environmental Protection of the Commonwealth.

"Eligible applicant." Any of the following:

(1) A county, municipality, council of governments, watershed organization, institution of higher education or nonprofit organization.

(2) An authorized organization as defined in 27 Pa.C.S. § 6103 (relating to definitions).

(3) A company, other than a producer.

"Fee." The unconventional gas well fee imposed under section 2302 (relating to unconventional gas well fee).

"Fund." The Unconventional Gas Well Fund.

"Highway mileage." The number of miles of public roads and streets most recently certified by the Department of Transportation as eligible for distribution of liquid fuels funds under the act of June 1, 1956 (1955 P.L.1944, No.655), referred to as the Liquid Fuels Tax Municipal Allocation Law.

"Municipality." A borough, city, town or township.

"Natural gas." A fossil fuel consisting of a mixture of hydrocarbon gases, primarily 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.

"Number of spud unconventional gas wells." The most recent numerical count of spud unconventional gas wells on the inventory maintained and provided to the commission by the department as of the last day of each month.

"Population." As follows:

(1) Population of the Commonwealth and population of a county shall be determined using the United States Census Bureau's most recently released Annual Estimates of the Resident Population for Counties of Pennsylvania.

(2) Population of a municipality shall be determined using the United States Census Bureau's most recently released Annual Estimates for the Resident Population for Incorporated Places in Pennsylvania.

(3) Population of municipalities not included in the report referenced under paragraph (2) shall be determined using the United States Census Bureau's most recently released Annual Estimates of the Resident Population for Minor Civil Divisions in Pennsylvania.

"Producer." A person or its subsidiary, affiliate or holding company that holds a permit or other authorization to engage in the business of severing natural gas for sale, profit or commercial use from an unconventional gas well in this Commonwealth. The term shall not include a producer that severs natural gas from a site used to store natural gas that did not originate from the site.

"Spud." The actual start of drilling of an unconventional gas well.

"Stripper well." An unconventional gas well incapable of producing more than 90,000 cubic feet of gas per day during any calendar month, including production from all zones and multilateral well bores at a single well, without regard to whether the production is separately metered.

"Unconventional formation." A geological shale formation existing below the base of the Elk Sandstone or its geologic equivalent stratigraphic interval where natural 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 of the formation to the well bore.

"Unconventional gas well." A bore hole drilled or being drilled for the purpose of or to be used for the production of natural gas from an unconventional formation.

"Vertical gas well." An unconventional gas well which utilizes hydraulic fracture treatment through a single vertical well bore and produces natural gas in quantities greater than that of a stripper well.

§ 2302. Unconventional gas well fee.

(a) General rule.--The governing body of a county that has a spud unconventional gas well located within its borders may elect whether to impose a fee on unconventional gas wells that have been spud in the county.

(a.1) Passage of ordinance.--Within 60 days after the effective date of this section, the governing body of a county under subsection (a) may adopt an ordinance to impose an unconventional gas well fee. The governing body of a county must notify the commission and give public notice of its intent to adopt the ordinance.

(a.2) County ordinance.--The ordinance imposing a fee under subsection (a.1) shall be clear and in language that is readily understandable by a layperson and shall be in the following form:

The county of (insert name) hereby imposes an unconventional gas well fee on each unconventional gas well spud in this county.

(a.3) Prohibition.--

(1) A county subject to this section, in which the governing body does not adopt an ordinance imposing an unconventional gas well fee within 60 days of the effective date of this section, shall be prohibited from receiving funds under sections 2314(d)(1) (relating to distribution of fee) and 2315(a.1)(3) and (5) (relating to Statewide initiatives).

(2) The prohibition on receiving funds shall remain in effect until the county adopts an ordinance imposing an unconventional gas well fee. The prohibition shall expire and funds may be received for the calendar year following the adoption of an ordinance imposing the fee under this section.

(a.4) Alternate imposition.--

(1) If the governing body of a county does not impose an unconventional gas well fee under subsection (a), the municipalities in the county may compel the imposition of an unconventional gas well fee on each unconventional gas well spud in the county by adopting resolutions under paragraphs (2), (3) and (4).

(2) Following 60 days but not more than 120 days after the effective date of this section, if the governing bodies of at least half of the municipalities located in a county or municipalities representing at least 50% of the population of the county adopt resolutions to impose unconventional gas well fees on all unconventional gas wells spud in the county, the fee shall take effect. If a resolution is adopted, a copy of the resolution shall be transmitted to the governing body of the county and the commission. The governing body of a municipality that is located in more than one county shall transmit a copy of a resolution adopted under this paragraph to the governing body of each county in which the municipality is located.

(3) The transmittal of resolutions by governing bodies under paragraph (2) shall constitute an imposition of the fee in that county. The population of a municipality that is located in more than one county shall be determined separately for each county on the basis of the municipality's population within each county.

(4) Resolutions adopted under this subsection must be framed in the following form:

The (insert name) in the county of (insert name) hereby resolves to have the county impose an unconventional gas well fee on each unconventional gas well spud in the county.

(5) A municipality which is located in a county that does not adopt an ordinance imposing an unconventional gas well fee and which does not adopt a resolution under paragraphs (2), (3) and (4) shall be prohibited from receiving funds under section 2314(d).

(b) Components.--The fee adopted under subsection (a), (a.1) or (a.4) is imposed on every producer and shall apply to unconventional gas wells spud in this Commonwealth regardless of when spudding occurred. Unconventional gas wells spud before the fee is imposed shall be considered to be spud in the calendar year prior to the imposition of the fee for purposes of determining the fee under this subsection. Prior to adjustment under subsection (c), the fee for each unconventional gas well shall be determined as follows:

(1) Year one:

(i) If the average annual price of natural gas is not more than $2.25, the fee shall be $40,000 for the calendar year in which the unconventional gas well is spud.

(ii) If the average annual price of natural gas is greater than $2.25 and less than $3.00, the fee shall be $45,000 for the calendar year in which the unconventional gas well is spud.

(iii) If the average annual price of natural gas is greater than $2.99 and less than $5.00, the fee shall be $50,000 for the calendar year in which the unconventional gas well is spud.

(iv) If the average annual price of natural gas is greater than $4.99 and less than $6.00, the fee shall be $55,000 for the calendar year in which the unconventional gas well is spud.

(v) If the average annual price of natural gas is more than $5.99, the fee shall be $60,000 for the calendar year in which the unconventional gas well is spud.

(2) Year two:

(i) If the average annual price of natural gas is not more than $2.25, the fee shall be $30,000 for the calendar year following the year in which the unconventional gas well is spud.

(ii) If the average annual price of natural gas is greater than $2.25 and less than $3.00, the fee shall be $35,000 for the calendar year following the year in which the unconventional gas well is spud.

(iii) If the average annual price of natural gas is greater than $2.99 and less than $5.00, the fee shall be $40,000 for the calendar year following the year in which the unconventional gas well is spud.

(iv) If the average annual price of natural gas is greater than $4.99 and less than $6.00, the fee shall be $45,000 for the calendar year following the year in which the unconventional gas well is spud.

(v) If the average annual price of natural gas is more than $5.99, the fee shall be $55,000 for the calendar year following the year in which the unconventional gas well is spud.

(3) Year three:

(i) If the average annual price of natural gas is not more than $2.25, the fee shall be $25,000 for the second calendar year following the year in which the unconventional gas well is spud.

(ii) If the average annual price of natural gas is greater than $2.25 and less than $3.00, the fee shall be $30,000 for the second calendar year following the year in which the unconventional gas well is spud.

(iii) If the average annual price of natural gas is greater than $2.99 and less than $5.00, the fee shall be $30,000 for the second calendar year following the year in which the unconventional gas well is spud.

(iv) If the average annual price of natural gas is greater than $4.99 and less than $6.00, the fee shall be $40,000 for the second calendar year following the year in which the unconventional gas well is spud.

(v) If the average annual price of natural gas is more than $5.99, the fee shall be $50,000 for the second calendar year following the year in which the unconventional gas well is spud.

(4) Years 4, 5, 6, 7, 8, 9 and 10:

(i) If the average annual price of natural gas is not more than $2.25, the fee shall be $10,000 for the third through ninth calendar years following the year in which the unconventional gas well is spud.

(ii) If the average annual price of natural gas is greater than $2.25 and less than $3.00, the fee shall be $15,000 for the third through ninth calendar years following the year in which the unconventional gas well is spud.

(iii) If the average annual price of natural gas is greater than $2.99, the fee shall be $20,000 for the third through ninth calendar years following the year in which the unconventional gas well is spud.

(5) Years 11, 12, 13, 14 and 15:

(i) If the average annual price of natural gas is less than $3.00, the fee shall be $5,000 for the 10th through 14th calendar years following the year in which the unconventional well is spud.

(ii) If the average annual price of natural gas is greater than $2.99, the fee shall be $10,000 for the 10th through 14th calendar years following the year in which the unconventional well is spud.

(6) For purposes of this subsection, the fee shall be determined using the average annual price of natural gas for the calendar year in which the fee is imposed.

(b.1) Nonproducing unconventional gas wells.--If a spud unconventional gas well begins paying the fee imposed under this section and is subsequently capped or does not produce natural gas in quantities greater than that of a stripper well within two years after paying the initial fee, then the fee shall be suspended:

(1) The fee shall be reinstated for a calendar year during which the unconventional gas well produces natural gas in quantities greater than that of a stripper well.

(2) Each calendar year during which a fee is suspended shall not be considered a calendar year following spud for purposes of determining the amount of the fee under subsection (b).

(c) Annual adjustment.--Beginning January 1, 2013, the commission shall annually adjust the fee amounts under subsection (b) to reflect any upward changes in the Consumer Price Index for all Urban Consumers for the Pennsylvania, New Jersey, Delaware and Maryland area in the preceding 12 months and shall immediately submit the adjusted fee amount to the Legislative Reference Bureau for publication as a notice in the Pennsylvania Bulletin. The fee shall be adjusted by multiplying the annual fee amount by any percentage increase to the Consumer Price Index for all Urban Consumers for the Pennsylvania, New Jersey, Delaware and Maryland area, rounded to the nearest $100. The resultant product shall be added to the fee amount, and the sum shall become the new annual fee amount under subsection (b). The annual adjustment under this subsection shall take effect if the total number of unconventional gas wells spud in the adjustment year exceeds the total number of unconventional gas wells spud in the prior year.

(d) Restimulated unconventional gas wells.--

(1) An unconventional gas well which after restimulation qualifies as a stripper well shall not be subject to this subsection.

(2) The year in which the restimulation occurs shall be considered the first year of spudding for purposes of imposing the fee under this section if:

(i) a producer restimulates a previously stimulated unconventional gas well following the tenth year after being spud by:

(A) hydraulic fracture treatments;

(B) using additional multilateral well bores;

(C) drilling deeper into an unconventional formation; or

(D) other techniques to expose more of the formation to the well bore; and

(ii) the restimulation results in a substantial increase in production.

(3) As used in this subsection, the term "substantial increase in production" means an increase in production amounting to more than 90,000 cubic feet of gas per day during a calendar month.

(e) Cessation.--Payments of the fee shall cease upon certification to the department by the producer that the unconventional gas well has ceased production and has been plugged according to the regulations established by the department.

(f) Vertical unconventional gas well fee.--The fee for a vertical unconventional gas well shall be 20% of the fee established in subsections (b) and (c), except that the fee under subsection (b)(5) shall not apply.

§ 2303. Administration.

(a) Fee due date.--

(1) Except as provided under paragraph (2), the fee imposed under this chapter shall be due by April 1, 2013, and each April 1 thereafter. The fee shall become delinquent if not remitted to the commission on the reporting date.

(2) For wells spud before January 1, 2012, a fee imposed under this chapter shall be due by September 1, 2012.

(b) Report.--By September 1, 2012, and April 1 of each year thereafter, each producer shall submit payment of the fee to the commission and a report on a form prescribed by the commission for the previous calendar year. The report shall include the following:

(1) The number of spud unconventional gas wells of a producer in each municipality within each county that has imposed a fee under this chapter.

(2) The date that each unconventional gas well identified under paragraph (1) was spud or ceased the production of natural gas.

(c) Costs of commission.--

(1) The commission may impose an annual administrative charge not to exceed $50 per spud unconventional gas well on each producer, to be paid with the submission under subsection (a), to pay for the actual costs of the commission to administer and enforce this chapter.

(2) Within 30 days of the effective date of this subsection, the commission shall estimate its expenditures through June 30, 2012, that will be directly attributable to the administration and enforcement of this chapter. The commission shall subtract the amount of the administrative charges imposed under paragraph (1) and assess any remaining balance on all producers subject to the administrative charge in proportion to the number of wells owned by each producer. Producers shall pay the assessments within 30 days of receipt of notice from the commission. The amount of the assessment may be challenged by a producer consistent with 66 Pa.C.S. § 510(c), (d) and (e) (relating to assessment for regulatory expenses upon public utilities). Any collections that exceed any of the following shall be used to offset the administrative charges or other funds received for fiscal year 2012-2013:

(i) The budget amount approved by the General Assembly and the Governor for administration and enforcement of this chapter and Chapter 33 (relating to local ordinances relating to oil and gas operations).

(ii) The actual expenditures directly attributable to the administration and enforcement of this chapter and Chapter 33.

(3) By June 30, 2012, and each June 30 thereafter, the commission shall estimate its expenditures for the next fiscal year that will be directly attributable to the administration and enforcement of this chapter. After subtracting any annual administrative charges imposed under paragraph (1), amounts received by the commission under section 2314(c.1)(2) (relating to distribution of fee) and any amounts collected during the prior fiscal year that exceeded actual expenditures directly attributable to the administration and enforcement of this chapter, the commission shall assess the remaining balance on all producers subject to the unconventional gas well fee in proportion to the number of wells owned by each producer. Producers shall pay the assessments within 30 days of the receipt of notice from the commission. The amount of the assessment may be challenged by a producer consistent with 66 Pa.C.S. § 510(c), (d) and (e). Any collections that exceed any of the following shall be used to offset administrative charges or assessments for the next fiscal year:

(i) The budget amount approved by the General Assembly and the Governor for administration and enforcement of this chapter and Chapter 33.

(ii) Actual expenditures directly attributable to the administration and enforcement of this chapter and Chapter 33.

§ 2304. Well information.

(a) List.--Within 14 days of the effective date of this section, the department shall provide the commission and, upon request, a county, with a list of all spud unconventional gas wells from the department. The department shall update the list and provide it to the commission on a monthly basis.

(b) Updates.--A producer subject to the fee shall notify the commission of the following within 30 days after a calendar month in which the change occurs:

(1) The spudding of an unconventional gas well.

(1.1) The initiation of production at an unconventional gas well.

(2) The removal of an unconventional gas well from production.

§ 2305. Duties of department.

(a) Confirmation of payment.--Prior to issuing a permit to drill an unconventional gas well in this Commonwealth, the department shall determine whether the producer has paid all fees owed for an existing unconventional gas well under section 2302 (relating to unconventional gas well fee).

(b) Prohibition.--The department shall not issue a permit to drill an unconventional gas well until all unconventional gas well fees owed under section 2302 that are not in dispute have been paid to the commission.

(c) Payment of fees.--The commission shall provide the department with information necessary to determine that the producer has paid all unconventional gas well fees owed for an unconventional gas well under section 2302.

§ 2306. (Reserved).

§ 2307. Commission.

(a) Powers.--The commission shall have the authority to make all inquiries and determinations necessary to calculate and collect the fee, administrative charges or assessments imposed under this chapter, including, if applicable, interest and penalties.

(b) Notice.--If the commission determines that the unconventional gas well fee has not been paid in full, it may issue a notice of the amount due and demand for payment and shall set forth the basis for the determination.

(c) Address.--Notice of failure to pay the correct fee shall be sent to the producer via certified mail.

(d) Time period.--Except as set forth in subsection (e), the commission may challenge the amount of a fee paid within three years after the date the report under section 2303(b) (relating to administration) is filed.

(e) Intent.--If no report is filed or a producer files a false or fraudulent report with the intent to evade the fee, an assessment of the amount owed may be made at any time.

§ 2308. Enforcement.

(a) Assessment.--The commission shall assess interest on any delinquent fee at the rate determined under section 2307(a) (relating to commission).

(b) Penalty.--In addition to the assessed interest under subsection (a), if a producer fails to make timely payment of the fee, there shall be added to the amount of the fee due a penalty of 5% of the amount of the fee if failure to file a timely payment is for not more than one month, with an additional 5% penalty for each additional month, or fraction of a month, during which the failure continues, not to exceed 25% in the aggregate.

(c) Timely payment.--If the commission determines that a producer has not made a timely payment of the fee, the commission shall send written notice of the amount of the deficiency to the producer within 30 days from the date of determining the deficiency. The commission shall notify the department of a producer that has failed to pay the fee for any unconventional gas well under section 2302 (relating to unconventional gas well fee). If the producer does not have a pending appeal related to payment of the fee in process, the department shall suspend the permit for that well until the fee has been paid.

(d) Remedies.--The remedies provided under this chapter are in addition to any other remedies provided by law or in equity.

(e) Lien.--Fines, fees, interest and penalties shall be collectible as authorized by law for the collection of debts. If the producer liable to pay an amount neglects or refuses to pay the amount after demand, the amount, together with costs, shall be a judgment in favor of the Commonwealth upon the property of the producer, but only after the judgment has been entered, docketed and recorded by the prothonotary of the county where the property is situated. The Commonwealth shall transmit to the prothonotaries of the respective counties certified copies of the judgments. Each prothonotary shall enter, docket and record the record in the prothonotary's office and index each judgment, without requiring the payment of costs as a condition precedent to the entry of the judgment.

§ 2309. Enforcement orders.

(a) Issuance.--The commission may issue an order as necessary to enforce this chapter. An order issued under this section shall take effect upon notice, unless the order specifies otherwise. A person aggrieved by an order under this section may appeal to Commonwealth Court under 42 Pa.C.S. § 763 (relating to direct appeals from government agencies).

(b) Compliance.--A producer has the duty to comply with an order issued under subsection (a). If a producer fails to proceed diligently to comply with an order within the time required, the producer shall be guilty of contempt and shall be punished by the court in an appropriate manner. The commission shall apply to Commonwealth Court, which shall have jurisdiction over matters relating to contempt.

§ 2310. Administrative penalties.

(a) Civil penalties.--In addition to any other proceeding authorized by law, the commission may assess a civil penalty not to exceed $2,500 per violation upon a producer for the violation of this chapter. In determining the amount of the penalty, the commission shall consider the willfulness of the violation and other relevant factors.

(b) Separate offense.--Each violation for each separate day and each violation of this chapter shall constitute a separate offense.

(c) Limitation of actions.--Notwithstanding any limitation in 42 Pa.C.S. Ch. 55 Subch. B (relating to civil actions and proceedings), an action under this section must be brought within three years of the violation.

(d) Procedure.--A penalty under this chapter is subject to 66 Pa.C.S. Ch. 3 Subch. B (relating to investigations and hearings).

§ 2311. (Reserved).

§ 2312. Recordkeeping.

A producer liable for the fee under this chapter shall keep records, make reports and comply with regulations of the commission. The commission may require a producer to make reports, render statements or keep records as the commission deems sufficient to determine liability for the fee.

§ 2313. Examinations.

(a) Access.--The commission or its authorized agents or representatives shall:

(1) Have access to the relevant books, papers and records of any producer in order to verify the accuracy and completeness of a report filed or fee paid under this chapter.

(2) Require the preservation of all relevant books, papers and records for an appropriate period not to exceed three years from the end of the calendar year to which the records relate.

(3) Examine any employee of a producer under oath concerning the severing of natural gas subject to a fee or any matter relating to the enforcement of this chapter.

(4) Compel the production of relevant books, papers and records and the attendance of all individuals who the commission believes to have knowledge of relevant matters in accordance with 66 Pa.C.S. (relating to public utilities).

(b) Unauthorized disclosure.--Any information obtained by the commission as a result of any report, examination, investigation or hearing under this chapter shall be confidential and shall not be disclosed, except for official purposes, in accordance with judicial order or as otherwise provided by law. A commissioner or an employee of the commission who without authorization divulges confidential information shall be subject to disciplinary action by the commission.

§ 2314. Distribution of fee.

(a) Establishment.--There is established a fund in the State Treasury to be known as the Unconventional Gas Well Fund to be administered by the commission.

(b) Deposit.--All fees imposed and collected under this chapter shall be deposited into the fund and are hereby appropriated for the purpose set forth in this section.

(c) Conservation districts.--

(1) From fees collected for 2011, $2,500,000 from the fund shall be distributed to county conservation districts.

(2) From fees collected for 2012, $5,000,000 from the fund shall be distributed to county conservation districts.

(3) From fees collected for 2013, and each year thereafter, $7,500,000 from the fund shall be distributed to county conservation districts.

(4) Beginning July 1, 2014, each July 1 thereafter, the amount distributed under paragraph (3) shall be increased by any percentage increase in the Consumer Price Index for All Urban Consumers for the most recent 12-month period for which figures have been officially reported by the Bureau of Labor Statistics immediately prior to July 1.

(5) Funds under paragraphs (1), (2) and (3) shall be distributed in accordance with the following:

(i) One-half shall be distributed by dividing the amount equally among conservation districts for any use consistent with the act of May 15, 1945 (P.L.547, No.217), known as the Conservation District Law.

(ii) One-half shall be distributed by the State Conservation Commission in a manner consistent with the Conservation District Law and the provisions of the State Conservation Commission's Conservation District Fund Allocation Program-Statement of Policy under 25 Pa. Code Ch. 83 Subch. B (relating to Conservation District Fund Allocation Program-Statement of Policy).

(c.1) Additional distributions.--From fees collected under this chapter and deposited in the fund for 2011 and each year thereafter:

(1) One million dollars shall be distributed to the Pennsylvania Fish and Boat Commission for costs relating to the review of applications for permits to drill unconventional gas wells.

(2) One million dollars shall be distributed to the commission for costs to administer this chapter and Chapter 33 (relating to local ordinances relating to oil and gas operations).

(3) Six million dollars to the department for the administration of this act and the enforcement of acts relating to clean air and clean water.

(4) Seven hundred fifty thousand dollars to the Pennsylvania Emergency Management Agency for emergency response planning, training and coordination related to natural gas production from unconventional gas wells.

(5) Seven hundred fifty thousand dollars to the Office of State Fire Commissioner for the development, delivery and sustainment of training and grant programs for first responders and the acquisition of specialized equipment for response to emergencies relating to natural gas production from unconventional gas wells.

(6) One million dollars to the Department of Transportation for rail freight assistance.

(c.2) Natural gas energy development.--Following distributions from the fund under subsections (c) and (c.1), the following amounts shall be deposited into the Marcellus Legacy Fund for distribution to the department for the Natural Gas Energy Development Program under Chapter 27 (relating to Natural Gas Energy Development Program):

(1) For 2011, $10,000,000.

(2) For 2012, $7,500,000.

(3) For 2013, $2,500,000.

(c.3) Report.--All agencies or organizations receiving funds under subsections (c), (c.1) and (c.2) shall submit a report by December 31, 2012, and December 31 of each year thereafter to the Secretary of the Budget and the Appropriations Committee of the Senate and the Appropriations Committee of the House of Representatives. The report shall include an itemization and explanation of the use of all funds received under subsections (c), (c.1) and (c.2).

(d) Distribution.--Except as provided in section 2302(a.3) and (a.4) (relating to unconventional gas well fee), following fee distribution under subsections (c), (c.1) and (c.2), from fees collected for 2011 and each year thereafter, 60% of the revenue remaining in the fund from fees collected for the prior year are hereby appropriated to counties and municipalities for purposes authorized under subsection (g). Counties and municipalities are encouraged, where appropriate, to jointly fund projects that cross jurisdictional lines. The commission, after making a disbursement under subsection (f), shall distribute the remaining funds appropriated as follows within three months after the date the fee is due:

(1) Except as provided in section 2302(a.3), 36% shall be distributed to counties in which spud unconventional gas wells are located. The amount for each county to which funds will be distributed shall be determined using a formula that divides the number of spud unconventional gas wells in the county by the number of spud unconventional gas wells in this Commonwealth and multiplies the resulting percentage by the amount available for distribution under this paragraph.

(2) Except as provided in section 2302(a.4), 37% shall be distributed to municipalities in which spud unconventional gas wells are located. The amount for each municipality to which funds will be distributed shall be determined using a formula that divides the number of spud unconventional gas wells in the municipality by the number of spud unconventional gas wells in this Commonwealth and multiplies the resulting percentage by the amount available for distribution under this paragraph.

(3) Except as provided in section 2302(a.4), 27% shall be distributed to municipalities located in a county in which spud unconventional gas wells are located. The amount available for distribution in each county shall be determined by dividing the number of spud unconventional gas wells in the county by the number of spud unconventional gas wells in this Commonwealth and multiplying the resulting percentage by the amount available for distribution under this paragraph. The resulting amount available for distribution in each county in which spud unconventional gas wells are located shall be distributed to each municipality in the county to which funds will be distributed as follows:

(i) Except as provided in section 2302(a.4), 50% of the amount available under this paragraph shall be distributed to municipalities in which spud unconventional gas wells are located and to municipalities that are either contiguous with a municipality in which spud unconventional gas wells are located or are located within five linear miles of a spud unconventional gas well. The distribution shall be made as follows:

(A) One-half shall be distributed to each municipality using a formula that divides the population of the eligible municipality within the county by the total population of all eligible municipalities within the county and multiplies the resulting percentage by the amount allocated to the county under this subparagraph.

(B) One-half shall be distributed to each municipality using a formula that divides the highway mileage of the eligible municipality within the county by the total highway mileage of all eligible municipalities within the county and multiplies the resulting percentage by the amount allocated to the county under this subparagraph.

(ii) Except as provided in section 2302(a.4), 50% of the amount available under this paragraph shall be distributed to each municipality in the county regardless of whether an unconventional gas well is located in the municipality as follows:

(A) One-half shall be distributed to each municipality using a formula that divides the population of the municipality within the county by the total population of the county and multiplies the resulting percentage by the amount allocated to the county under this subparagraph.

(B) One-half shall be distributed to each municipality using a formula that divides the highway mileage of the municipality within the county by the total highway mileage of the county and multiplies the resulting percentage by the amount allocated to the county under this subparagraph.

(e) Restriction.--The amount allocated to each municipality under subsection (d) shall not exceed the greater of $500,000 or 50% of the total budget for the prior fiscal year beginning with the 2010 budget year and continuing every year thereafter, adjusted to reflect any upward changes in the Consumer Price Index for all Urban Consumers for the Pennsylvania, New Jersey, Delaware and Maryland area in the preceding 12 months. Any remaining money shall be retained by the commission and deposited in the Housing Affordability and Rehabilitation Enhancement Fund for the uses specified under subsection (f).

(f) Housing Affordability and Rehabilitation Enhancement Fund.--

(1) From fees collected for 2011, $2,500,000 from the fund shall be distributed to the Housing Affordability and Rehabilitation Enhancement Fund under the act of November 23, 2010 (P.L.1035, No.105), entitled "An act amending the act of December 3, 1959 (P.L.1688, No.621), entitled, as amended, 'An act to promote the health, safety and welfare of the people of the Commonwealth by broadening the market for housing for persons and families of low and moderate income and alleviating shortages thereof, and by assisting in the provision of housing for elderly persons through the creation of the Pennsylvania Housing Finance Agency as a public corporation and government instrumentality; providing for the organization, membership and administration of the agency, prescribing its general powers and duties and the manner in which its funds are kept and audited, empowering the agency to make housing loans to qualified mortgagors upon the security of insured and uninsured mortgages, defining qualified mortgagors and providing for priorities among tenants in certain instances, prescribing interest rates and other terms of housing loans, permitting the agency to acquire real or personal property, permitting the agency to make agreements with financial institutions and Federal agencies, providing for the purchase by persons of low and moderate income of housing units, and approving the sale of housing units, permitting the agency to sell housing loans, providing for the promulgation of regulations and forms by the agency, prescribing penalties for furnishing false information, empowering the agency to borrow money upon its own credit by the issuance and sale of bonds and notes and by giving security therefor, permitting the refunding, redemption and purchase of such obligations by the agency, prescribing remedies of holders of such bonds and notes, exempting bonds and notes of the agency, the income therefrom, and the income and revenues of the agency from taxation, except transfer, death and gift taxes; making such bonds and notes legal investments for certain purposes; and indicating how the act shall become effective,' providing for the Pennsylvania Housing Affordability and Rehabilitation Enhancement Program; and establishing the Housing Affordability and Rehabilitation Enhancement Fund." From fees collected for 2012, and each year thereafter, $5,000,000 shall be annually distributed to the Housing Affordability and Rehabilitation Enhancement Fund.

(2) Funds under paragraph (1) shall be used for the following purposes:

(i) To provide support to projects in a county in which producing unconventional gas wells are located that increase availability of quality, safe, affordable housing for low-income and moderate-income individuals or families, persons with disabilities or elderly persons.

(ii) To provide rental assistance in a county in which producing unconventional gas wells are located to persons or families whose household income does not exceed the area median income.

(3) No less than 50% of the funds available under this subsection shall be used in fifth, sixth, seventh and eighth class counties.

(g) Use of funds.--A county or municipality receiving funds under subsection (d) shall use the funds received only for the following purposes associated with natural gas production from unconventional gas wells within the county or municipality:

(1) Construction, reconstruction, maintenance and repair of roadways, bridges and public infrastructure.

(2) Water, storm water and sewer systems, including construction, reconstruction, maintenance and repair.

(3) Emergency preparedness and public safety, including law enforcement and fire services, hazardous material response, 911, equipment acquisition and other services.

(4) Environmental programs, including trails, parks and recreation, open space, flood plain management, conservation districts and agricultural preservation.

(5) Preservation and reclamation of surface and subsurface waters and water supplies.

(6) Tax reductions, including homestead exclusions.

(7) Projects to increase the availability of safe and affordable housing to residents.

(8) Records management, geographic information systems and information technology.

(9) The delivery of social services.

(10) Judicial services.

(11) For deposit into the county or municipality's capital reserve fund if the funds are used solely for a purpose set forth in this subsection.

(12) Career and technical centers for training of workers in the oil and gas industry.

(13) Local or regional planning initiatives under the act of July 31, 1968 (P.L.805, No.247), known as the Pennsylvania Municipalities Planning Code.

(h) Reporting.--

(1) The commission shall submit an annual report on all funds in the fund. The report shall include a detailed listing of all deposits and expenditures of the fund and be submitted to the chairman and the minority chairman of the Appropriations Committee of the Senate, the chairman and the minority chairman of the Environmental Resources and Energy Committee of the Senate, the chairman and the minority chairman of the Appropriations Committee of the House of Representatives and the chairman and the minority chairman of the Environmental Resources and Energy Committee of the House of Representatives. The report shall be submitted by December 30, 2012, and by September 30 of each year thereafter.

(2) All counties and municipalities receiving funds from the fund under this section shall submit information to the commission on a form prepared by the commission that sets forth the amount and use of the funds received in the prior calendar year. The form shall set forth that the funds received were committed to a specific project or use as authorized in this section. The reports shall be published annually on the county or municipality's publicly accessible Internet website.

(i) Availability of funds.--Distribution of funds under this section and section 2315 (relating to Statewide initiatives) are contingent on availability of funds in the fund. If sufficient funds are not available, the commission shall disburse funds on a pro rata basis.

§ 2315. Statewide initiatives.

(a) Establishment.--There is established in the State Treasury a fund to be known as the Marcellus Legacy Fund.

(a.1) Deposit and distribution.--Following distribution under section 2314(c), (c.1) and (c.2) (relating to distribution of fee) from fees collected for 2011 and each year thereafter, 40% of the remaining revenue in the fund shall be deposited into the Marcellus Legacy Fund and appropriated to the commission and distributed within three months after the date the fee is due as follows:

(1) Twenty percent to the Commonwealth Financing Authority for grants to eligible applicants for the following:

(i) Acid mines: damage, abatement and cleanup and mine reclamation, with priority given to projects which recycle and treat water for use in drilling operations.

(ii) Orphan or abandoned oil and gas well plugging.

(iii) Complying with the act of January 24, 1966 (1965 P.L.1535, No.537), known as the Pennsylvania Sewage Facilities Act.

(iv) Planning acquisition, development, rehabilitation and repair of greenways, recreational trails, open space, parks and beautification projects.

(v) Programs to establish baseline water quality data on private water supplies.

(vi) Watershed programs and related projects.

(vii) Up to 25% of funds distributed to the Commonwealth Financing Authority under this paragraph may be utilized for flood control projects.

(2) Ten percent to the Environmental Stewardship Fund.

(3) Twenty-five percent to the Highway Bridge Improvement Restricted Account in the Motor License Fund to counties to be distributed to fund the cost of the replacement or repair of locally owned at-risk deteriorated bridges. Funds shall be distributed to counties proportionately based on the population of the county as follows:

(i) In each county, the distribution shall be according to the following formula:

(A) Divide:

(I) the total population of the county; by

(II) the total population of the Commonwealth;

(B) Express the quotient under clause (A) as a percentage.

(C) Multiply:

(I) the percentage under clause (B); by

(II) the amount of money to be distributed under this paragraph.

(ii) Each county shall receive a minimum of $40,000 to the extent funds are available.

(iii) The Department of Transportation shall release money under this paragraph upon approval of a plan submitted by a county or municipality to repair an at-risk deteriorated bridge. The plan must include funding for replacement or repair.

(iv) A county of the first or second class may submit a plan to use its funds under this paragraph for at-risk deteriorated bridges owned by a public transportation authority.

(4) Twenty-five percent for water and sewer projects. Fifty percent of the amount distributed under this paragraph shall be transmitted to the Pennsylvania Infrastructure Investment Authority to be used in accordance with the act of March 1, 1988 (P.L.82, No.16), known as the Pennsylvania Infrastructure Investment Authority Act. Fifty percent of the amount distributed under this paragraph shall be distributed to the H2O PA program to be used by the Commonwealth Financing Authority in accordance with section 301 of the act of July 9, 2008 (P.L.908, No.63), known as the H2O PA Act. The prohibition on grants for projects located in a city or county of the first or second class under section 301 of the H2O PA Act shall not apply to funds distributed to the H2O PA Program under this paragraph.

(5) Fifteen percent for the planning, acquisition, development, rehabilitation and repair of greenways, recreational trails, open space, natural areas, community conservation and beautification projects, community and heritage parks and water resource management. Funds may be used to acquire lands for recreational or conservation purposes and land damaged or prone to drainage by storms or flooding. Funds shall be distributed to counties proportionately based on the population of the county as follows:

(i) In each county, the distribution shall be according to the following formula:

(A) Divide:

(I) the total population of the county; by

(II) the total population of the Commonwealth.

(B) Express the quotient under clause (A) as a percentage.

(C) Multiply:

(I) the percentage under clause (B); by

(II) the amount of funds available under this paragraph.

(ii) Each county shall receive a minimum of $25,000 to the extent funds are available.

(6) Five percent for distribution as follows:

(i) From fees collected in 2011, 2012 and 2013, to the Department of Community and Economic Development for projects to provide for the planning, development, remodeling, remediation and construction of projects relating to oil, natural gas or other chemical substances. Projects under this subparagraph may include blending facilities to liquefy or refine natural gas or to convert natural gas to ethane, propane or other substances; facilities to refine oil; or facilities to refine or process oil, heating oil, jet fuel or any other chemical substance. Following 2014, funds not utilized by the Department of Community and Economic Development under this subparagraph shall be deposited in the Hazardous Sites Cleanup Fund.

(ii) After 2013, to the Hazardous Sites Cleanup Fund.

(b) Restriction on use of proceeds.--

(1) Funds distributed under subsection (a.1) shall not be used for the purpose of public relations, outreach not directly related to project implementation, communications, lobbying or litigation.

(2) Funds distributed under subsection (a.1) may not be used by an authorized organization as defined in 27 Pa.C.S. § 6103 (relating to definitions) for land acquisition unless the authorized organization has obtained the written consent of the county and municipality in which the land is situated.

(c) Coordination.--The department and the Department of Conservation and Natural Resources shall review applications for funding as requested by the Commonwealth Financing Authority and provide recommendations on priority of projects and project approval.

§ 2316. Small business participation.

(a) Requirement.--Producers shall provide maximum practicable contracting opportunities for diverse small businesses, including minority-owned business enterprises, women-owned business enterprises and veteran-owned businesses.

(b) Duties.--Producers shall do all of the following:

(1) Maintain a policy prohibiting discrimination in employment and contracting based on gender, race, creed or color.

(2) Use the database available on the Internet website of the Department of General Services to identify certified diverse small businesses, including minority-owned business enterprises, women-owned business enterprises and veteran-owned businesses, as potential contractors, subcontractors and suppliers for opportunities related to unconventional natural gas extraction.

(3) Respond to the survey under subsection (c) within 90 days.

(c) Survey.--Within one year of the effective date of this section, the Department of General Services shall send all producers a survey to report the producers' efforts to provide maximum practicable contracting opportunities related to unconventional natural gas extraction for diverse, small business participation.

(d) Reports.--The Department of General Services shall compile the results and submit an annual report to the State Government Committee of the Senate and the State Government Committee of the House of Representatives on the utilization of diverse small business participation related to unconventional natural gas extraction. The report shall be submitted no later than 150 days after the Department of General Services disseminated the survey to producers.

(e) Definition.--As used in this section, the term "diverse small business" means minority-owned business, women-owned business and veteran-owned business as determined by the Department of General Services.

§ 2317. Applicability.

The provisions of this chapter shall not negate or limit the responsibilities of any producer under this title, 74 Pa.C.S (relating to transportation) or 75 Pa.C.S. (relating to vehicles).

§ 2318. Expiration.

(a) Notice.--The Secretary of the Commonwealth shall, upon the imposition of a severance tax on unconventional gas wells in this Commonwealth, submit for publication in the Pennsylvania Bulletin notice of the imposition.

(b) Date.--This chapter shall expire on the date of the publication of the notice under subsection (a).

CHAPTER 25

OIL AND GAS LEASE FUND

Sec.

2501. Definitions.

2502. (Reserved).

2503. (Reserved).

2504. Appropriation of money.

2505. Funds.

§ 2501. Definitions.

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Department." The Department of Conservation and Natural Resources of the Commonwealth.

§ 2502. (Reserved).

§ 2503. (Reserved).

§ 2504. Appropriation of money.

Money in the Oil and Gas Lease Fund is specifically appropriated as provided in this chapter.

§ 2505. Funds.

(a) Priority.--Funds appropriated from the Oil and Gas Lease Fund to the department under the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal Code, or other appropriation act shall be distributed prior to allocations under subsection (b).

(b) Allocations.--Money in the Oil and Gas Lease Fund shall be allocated on an annual basis as follows:

(1) The following amounts shall be transferred from the Oil and Gas Lease Fund to the Marcellus Legacy Fund for distribution to the Environmental Stewardship Fund:

(i) For 2013, $20,000,000.

(ii) For 2014 and each year thereafter, $35,000,000.

(2) The following amounts shall be transferred from the Oil and Gas Lease Fund to the Marcellus Legacy Fund for distribution to the Hazardous Sites Cleanup Fund:

(i) For 2015, $5,000,000.

(ii) For 2016 and each year thereafter, $15,000,000.

CHAPTER 27

NATURAL GAS ENERGY

DEVELOPMENT PROGRAM

Sec.

2701. Definitions.

2702. Assistance.

2703. Program.

2704. Expiration.

§ 2701. Definitions.

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Bi-fuel vehicle." A motor vehicle equipped to be propelled in part by compressed natural gas fuel and in part by diesel or gasoline fuel.

"Company." An entity doing business in this Commonwealth which is subject to tax under Article III, IV or VI of the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971.

"Dedicated compressed natural gas vehicle." A motor vehicle that is produced by an original equipment manufacturer and operates on 100% compressed natural gas fuel.

"Dedicated liquefied natural gas vehicle." A motor vehicle that is produced by an original equipment manufacturer and operates on 90% or more liquefied natural gas fuel and 10% or less on gasoline or diesel fuel.

"Department." The Department of Environmental Protection of the Commonwealth.

"Eligible applicant." Any of the following:

(1) A Commonwealth authority.

(2) A municipal authority.

(3) The Pennsylvania Turnpike Commission.

(4) A local transportation organization.

(5) A nonprofit entity.

(6) A State-owned or State-related university.

(7) A company.

"Eligible vehicles." The following shall constitute an eligible vehicle under this chapter:

(1) Dedicated compressed natural gas vehicles that are fleet vehicles and have a gross vehicle weight rating of at least 14,000 pounds.

(2) Dedicated liquefied natural gas vehicles that are fleet vehicles and have a gross vehicle weight rating of at least 14,000 pounds.

(3) Bi-fuel vehicles that are fleet vehicles.

"Fleet vehicle." A vehicle registered to an eligible applicant.

"Incremental purchase cost." The excess cost of a dedicated compressed natural gas vehicle, a dedicated liquefied natural gas vehicle or a bi-fuel vehicle, over the price for a gasoline or diesel fuel motor vehicle of a similar model. The term includes the cost to retrofit a vehicle to operate as a dedicated compressed natural gas vehicle, a dedicated liquefied natural gas vehicle or a bi-fuel vehicle.

"Local transportation organization." Any of the following:

(1) A political subdivision.

(2) A public transportation authority, port authority or redevelopment authority, which is:

(i) organized under:

(A) the laws of this Commonwealth; or

(B) an interstate compact; or

(ii) empowered to render, contract to render or assist in rendering transportation services in a limited area in this Commonwealth even though it may also render or assist in rendering transportation service in adjacent states.

(3) A nonprofit entity which directly or indirectly provides public transportation service.

(4) A nonprofit entity of public transportation providers operating within this Commonwealth.

"Original equipment manufacturer" or "OEM." The entity which originally manufactures the natural gas engine or the vehicle for sale.

"Start date." The date on which an eligible applicant first places in service, through purchase or contract, a new or retrofitted new natural gas vehicle.

§ 2702. Assistance.

(a) Funding.--Grants under this chapter shall be made from amounts deposited in the Marcellus Legacy Fund under section 2314(c.2) (relating to distribution of fee).

(b) Grants.--

(1) For fiscal year 2012-2013, the total amount of grants approved under this chapter may not exceed $10,000,000. Of that amount, $5,000,000 shall be allocated exclusively for local transportation organizations. If the total amount allocated to either the group of applications exclusive of local transportation organizations or the group of local transportation organization applicants is not approved in fiscal year 2012-2013, the unused portion shall be made available under paragraph (2).

(2) For fiscal year 2013-2014:

(i) The total amount of grants approved under this chapter may not exceed the sum of:

(A) $7,500,000; and

(B) any unused portion available under paragraph (1).

(ii) Of the amount under subparagraph (i), 50% shall be allocated exclusively for local transportation organizations.

(iii) If the total amount allocated to either the group of applications exclusive of local transportation organizations or the group of local transportation organization applicants is not approved in fiscal year 2013-2014, the unused portion shall be made available under paragraph (3).

(3) For fiscal year 2014-2015, the total amount of grants approved under this chapter may not exceed the sum of:

(i) $2,500,000; and

(ii) any unused portion available under paragraph (2).

§ 2703. Program.

(a) Establishment and purpose.--The Natural Gas Energy Development Program is established. The purpose of the program is to fund projects under this chapter.

(b) Eligible projects.--Funds transferred to the department under Chapter 23 (relating to unconventional gas well fee) shall be utilized for competitive grants to eligible applicants for eligible projects as provided in this subsection. In order to be eligible to receive a grant, an eligible applicant must provide or demonstrate all of the following to the department:

(1) A plan to convert five or more fleet vehicles into eligible vehicles or purchase five or more eligible vehicles. The plan must be financially viable within four years of the start date and must include the construction and utilization of a natural gas fueling station in this Commonwealth or the utilization of an existing natural gas fueling station.

(2) A statement of the projected usage of natural gas stated in gasoline or diesel gallon equivalents accompanied by the methodology utilized and how the project will increase use of domestic natural gas in this Commonwealth.

(3) The cost of the project.

(4) The source and amount of any funds to be contributed by the eligible applicant.

(5) The intent to maintain operations in this Commonwealth for a period of not less than six years from the start date.

(6) That all of the eligible vehicles purchased with the grant will be registered in this Commonwealth.

(7) The utilization of Federal funds on the project to the extent that Federal funds are available.

(8) Whether or not the project includes the utilization of a natural gas fueling facility that is accessible to the public.

(c) Guidelines.--Funds under this section shall be used in accordance with guidelines adopted by the department. The guidelines shall do all of the following:

(1) Restrict each grant for an eligible vehicle to cover no more than 50% of the incremental purchase cost.

(2) Limit the amount of the grant so that it shall not exceed $25,000 for each fleet vehicle.

(3) In the case of grants awarded for eligible vehicles which are bi-fuel vehicles, provide for annual reporting to the department by the eligible applicant demonstrating the usage of compressed natural gas for a period not to exceed four years after the start date.

(4) Require each eligible vehicle for which a grant is awarded to comply with all Federal and State safety requirements, including rules and regulations promulgated by the Environmental Protection Agency.

(d) Application.--An applicant shall submit an application including supporting information as required by the department.

(e) Project review.--The department shall review and prepare an assessment of each application and determine which projects will best utilize and promote the use of domestically produced natural gas in this Commonwealth.

(f) Administrative costs.--No more than 1% of the funds appropriated to the department shall be used for administrative costs.

(g) Report.--The department shall provide a report to the chairman and minority chairman of the Appropriations Committee of the Senate and the chairman and minority chairman of the Appropriations Committee of the House of Representatives by October 1, 2013, and each October 1 thereafter. The report shall be maintained on the department's official Internet website and shall include:

(1) A list of all grants approved during the previous fiscal year, including the amount of the grant and a description of each approved project.

(2) The estimated domestic energy benefits to date for all projects receiving funding during the fiscal year and the method used to determine estimated benefits.

§ 2704. Expiration.

This chapter shall expire December 31, 2016.

PART III

UTILIZATION

Chapter

31. (Reserved)

32. Development

33. Local Ordinances Relating to Oil and Gas Operation

35. Responsibility for Fee

CHAPTER 31

(RESERVED)

CHAPTER 32

DEVELOPMENT

Subchapter

A. Preliminary Provisions

B. General Requirements

C. Underground Gas Storage

D. Eminent Domain

E. Enforcement and Remedies

F. Miscellaneous Provisions

SUBCHAPTER A

PRELIMINARY PROVISIONS

Sec.

3201. Scope of chapter.

3202. Declaration of purpose of chapter.

3203. Definitions.

§ 3201. Scope of chapter.

This chapter relates to oil and gas.

§ 3202. Declaration of purpose of chapter.

The purposes of this chapter are to:

(1) Permit optimal development of oil and gas resources of this Commonwealth consistent with protection of the health, safety, environment and property of Pennsylvania citizens.

(2) Protect the safety of personnel and facilities employed in coal mining or exploration, development, storage and production of natural gas or oil.

(3) Protect the safety and property rights of persons residing in areas where mining, exploration, development, storage or production occurs.

(4) Protect the natural resources, environmental rights and values secured by the Constitution of Pennsylvania.

§ 3203. Definitions.

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Abandoned well." Any of the following:

(1) A well:

(i) that has not been used to produce, extract or inject any gas, petroleum or other liquid within the preceding 12 months;

(ii) for which equipment necessary for production, extraction or injection has been removed; or

(iii) considered dry and not equipped for production within 60 days after drilling, redrilling or deepening.

(2) The term does not include wells granted inactive status.

"Additive." A hydraulic fracturing chemical.

"Alteration." An operation which changes the physical characteristics of a well bore, including stimulation or removing, repairing or changing the casing. For the purpose of this chapter only, the term does not include:

(1) Repairing or replacing of the casing if the activity does not affect the depth or diameter of the well bore, the use or purpose of the well does not change and the activity complies with regulations promulgated under this chapter, except that this exclusion does not apply:

(i) to production casings in coal areas when the production casings are also the coal protection casings; or

(ii) when the method of repairing or replacing the casing would affect the coal protection casing.

(2) Stimulation of a well.

"Board." The Oil and Gas Technical Advisory Board.

"Bridge." An obstruction placed in a well at any depth.

"Building." An occupied structure with walls and roof within which persons live or customarily work.

"Casing." A string or strings of pipe commonly placed in wells drilled for natural gas or petroleum.

"Cement" or "cement grout." Any of the following:

(1) Hydraulic cement properly mixed with water only.

(2) A mixture of materials adequate for bonding or sealing of well bores as approved by regulations promulgated under this chapter.

"Chemical." Any element, chemical compound or mixture of elements or compounds that has its own specific name or identity, such as a chemical abstract service number.

"Chemical Disclosure Registry." The chemical registry Internet website developed by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission or their successor organizations.

"Chemical family." A group of chemicals that share similar chemical properties and have a common general name.

"Coal mine." Any of the following:

(1) Operations in a coal seam, including excavated portions, abandoned portions and places actually being worked.

(2) Underground workings and shafts, slopes, tunnels and other ways and openings, including those which are in the course of being sunk or driven, along with all roads and facilities connected with them below the surface.

"Coal operator." A person that operates or proposes to operate a coal mine as an owner or lessee.

"Completion of a well." The date after treatment, if any, that the well is properly equipped for production of oil or gas, or, if the well is dry, the date that the well is abandoned.

"Department." The Department of Environmental Protection of the Commonwealth.

"Drilling." The drilling or redrilling of a well or the deepening of an existing well.

"Fresh groundwater." Water in that portion of the generally recognized hydrologic cycle which occupies the pore spaces and fractures of saturated subsurface materials.

"Gas." Any of the following:

(1) A fluid, combustible or noncombustible, which is produced in a natural state from the earth and maintains a gaseous or rarified state at standard temperature of 60 degrees Fahrenheit and pressure 14.7 PSIA.

(2) Any manufactured gas, by-product gas or mixture of gases or natural gas liquids.

"Health professional." A physician, physician assistant, nurse practitioner, registered nurse or emergency medical technician licensed by the Commonwealth.

"Hydraulic fracturing chemical." Any chemical substance or combination of substances, including any chemicals and proppants, that is intentionally added to a base fluid for purposes of preparing a stimulation fluid for use in hydraulic fracturing.

"Inactivate." To shut off the vertical movement of gas in a gas storage well by means of a temporary plug or other suitable device or by injecting bentonitic mud or other equally nonporous material into the well.

"Linear foot." A unit or measurement in a straight line on a horizontal plane.

"Natural gas liquids." Hydrocarbons in natural gas which are separated from the gas as liquids through the process of absorption, condensation, adsorption or other methods in gas processing of cycling plants.

"Oil." Hydrocarbons in liquid form at standard temperature of 60 degrees Fahrenheit and pressure 14.7 PSIA, also referred to as petroleum.

"Operating coal mine." Any of the following:

(1) An underground coal mine which is producing coal or has been in production of coal at any time during the 12 months immediately preceding the date its status is put in question, including contiguous worked-out or abandoned coal mines to which it is connected underground.

(2) An underground coal mine to be established or reestablished under paragraph (1).

"Operating well." A well that is not plugged and abandoned.

"Operator." A well operator.

"Orphan well." A well abandoned prior to April 18, 1985, that has not been affected or operated by the present owner or operator and from which the present owner, operator or lessee has received no economic benefit other than as a landowner or recipient of a royalty interest from the well.

"Outside coal boundaries." When used in conjunction with the term "operating coal mine," the boundaries of the coal acreage assigned to the coal mine under an underground mine permit issued by the Department of Environmental Protection.

"Owner." A person who owns, manages, leases, controls or possesses a well or coal property. The term does not apply to orphan wells, except where the Department of Environmental Protection determines a prior owner or operator benefited from the well as provided in section 3220(a) (relating to plugging requirements).

"Person." An individual, association, partnership, corporation, political subdivision or agency of the Federal Government, State government or other legal entity.

"Petroleum." Hydrocarbons in liquid form at standard temperature of 60 degrees Fahrenheit and pressure 14.7 PSIA, also referred to as oil.

"Pillar." A solid block of coal surrounded by either active mine workings or a mined-out area.

"Plat." A map, drawing or print accurately drawn to scale showing the proposed or existing location of a well or wells.

"Reservoir protective area." The area surrounding a storage reservoir boundary, but within 2,000 linear feet of the storage reservoir boundary, unless an alternate area has been designated by the Department of Environmental Protection, which is deemed reasonably necessary to afford protection to the reservoir, under a conference held in accordance with section 3251 (relating to conferences).

"Retreat mining." Removal of coal pillars, ribs and stumps remaining after development mining has been completed in that section of a coal mine.

"Secretary." The Secretary of Environmental Protection of the Commonwealth.

"Storage operator." A person who operates or proposes to operate a storage reservoir as an owner or lessee.

"Storage reservoir." That portion of a subsurface geological stratum into which gas is or may be injected for storage purposes or to test suitability of the stratum for storage.

"Unconventional formation." A geological shale formation existing below the base of the Elk Sandstone or its geologic equivalent stratigraphic interval where natural 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 of the formation to the well bore.

"Unconventional well." A bore hole drilled or being drilled for the purpose of or to be used for the production of natural gas from an unconventional formation.

"Water management plan." A plan associated with drilling or completing a well in an unconventional formation that demonstrates that the withdrawal and use of water sources protects those sources as required by law and protects public health, safety and welfare.

"Water purveyor." Any of the following:

(1) The owner or operator of a public water system as defined in section 3 of the act of May 1, 1984 (P.L.206, No.43), known as the Pennsylvania Safe Drinking Water Act.

(2) Any person subject to the act of June 24, 1939 (P.L.842, No.365), referred to as the Water Rights Law.

"Water source."

(1) Any of the following:

(i) Waters of this Commonwealth.

(ii) A source of water supply used by a water purveyor.

(iii) Mine pools and discharges.

(iv) Any other waters that are used for drilling or completing a well in an unconventional formation.

(2) The term does not include flowback or production waters or other fluids:

(i) which are used for drilling or completing a well in an unconventional formation; and

(ii) which do not discharge into waters of this Commonwealth.

"Well." A bore hole drilled or being drilled for the purpose of or to be used for producing, extracting or injecting gas, petroleum or another liquid related to oil or gas production or storage, including brine disposal, but excluding a bore hole drilled to produce potable water. The term does not include a bore hole drilled or being drilled for the purpose of or to be used for:

(1) Systems of monitoring, producing or extracting gas from solid waste disposal facilities, if the bore hole is a well subject to the act of July 7, 1980 (P.L.380, No.97), known as the Solid Waste Management Act, which does not penetrate a workable coal seam.

(2) Degasifying coal seams, if the bore hole is:

(i) used to vent methane to the outside atmosphere from an operating coal mine; regulated as part of the mining permit under the act of June 22, 1937 (P.L.1987, No.394), known as The Clean Streams Law, and the act of May 31, 1945 (P.L.1198, No.418), known as the Surface Mining Conservation and Reclamation Act; and drilled by the operator of the operating coal mine for the purpose of increased safety; or

(ii) used to vent methane to the outside atmosphere under a federally funded or State-funded abandoned mine reclamation project.

"Well control emergency." An incident during drilling, operation, workover or completion that, as determined by the Department of Environmental Protection, poses a threat to public health, welfare or safety, including a loss of circulation fluids, kick, casing failure, blowout, fire and explosion.

"Well control specialist." Any person trained to respond to a well control emergency with a current certification from a well control course accredited by the International Association of Drilling Contractors or other organization approved by the Department of Environmental Protection.

"Well operator." Any of the following:

(1) The person designated as operator or well operator on the permit application or well registration.

(2) If a permit or well registration was not issued, a person who locates, drills, operates, alters or plugs a well or reconditions a well with the purpose of production from the well.

(3) If a well is used in connection with underground storage of gas, a storage operator.

"Wetland." Areas inundated or saturated by surface water or groundwater at a frequency and duration sufficient to support, and which normally support, a prevalence of vegetation typically adapted for life in saturated soil conditions, including swamps, marshes, bogs and similar areas.

"Workable coal seams." A coal seam which:

(1) is actually being mined in the area in question under this chapter by underground methods; or

(2) in the judgment of the Department of Environmental Protection, can reasonably be expected to be mined by underground methods.

SUBCHAPTER B

GENERAL REQUIREMENTS

Sec.

3211. Well permits.

3212. Permit objections.

3212.1. Comments by municipalities and storage operators.

3213. Well registration and identification.

3214. Inactive status.

3215. Well location restrictions.

3216. Well site restoration.

3217. Protection of fresh groundwater and casing requirements.

3218. Protection of water supplies.

3218.1. Notification to public drinking water systems.

3218.2. Containment for unconventional wells.

3218.3. Transportation records regarding wastewater fluids.

3218.4. Corrosion control requirements.

3218.5. Gathering lines.

3219. Use of safety devices.

3219.1. Well control emergency response.

3220. Plugging requirements.

3221. Alternative methods.

3222. Well reporting requirements.

3222.1. Hydraulic fracturing chemical disclosure requirements.

3223. Notification and effect of well transfer.

3224. Coal operator responsibilities.

3225. Bonding.

3226. Oil and Gas Technical Advisory Board.

3227. Air contaminant emissions.

§ 3211. Well permits.

(a) Permit required.--No person shall drill or alter a well, except for alterations which satisfy the requirements of subsection (j), without having first obtained a well permit under subsections (b), (c), (d) and (e), or operate an abandoned or orphan well unless in compliance with subsection (l). A copy of the permit shall be kept at the well site during preparation and construction of the well site or access road during drilling or alteration of the well. No person shall be required to obtain a permit to redrill a nonproducing well if the redrilling:

(1) has been evaluated and approved as part of an order from the department authorizing cleaning out and plugging or replugging a nonproducing well under section 13(c) of the act of December 18, 1984 (P.L.1069, No.214), known as the Coal and Gas Resource Coordination Act; and

(2) is incidental to a plugging or replugging operation and the well is plugged within 15 days of redrilling.

(b) Plat.--

(1) The permit application shall be accompanied by a plat prepared by a competent engineer or a competent surveyor, on forms furnished by the department, showing the political subdivision and county in which the tract of land upon which the well to be drilled, operated or altered is located; a list of municipalities adjacent to the well site; the name of the surface landowner of record and lessor; the name of all surface landowners and water purveyors whose water supplies are within 1,000 feet of the proposed well location or, in the case of an unconventional well, within 3,000 feet from the vertical well bore; the name of the owner of record or operator of all known underlying workable coal seams; the acreage in the tract to be drilled; the proposed location of the well determined by survey, courses and distances of the location from two or more permanent identifiable points or landmarks on the tract boundary corners; the proposed angle and direction of the well if the well is to be deviated substantially from a vertical course; the number or other identification to be given the well; the workable coal seams underlying the tract of land upon which the well is to be drilled or altered and which shall be cased off under section 3217 (relating to protection of fresh groundwater and casing requirements); and any other information needed by the department to administer this chapter.

(2) The applicant shall forward by certified mail a copy of the plat to the surface landowner; the municipality in which the tract of land upon which the well to be drilled is located; each municipality within 3,000 feet of the proposed unconventional vertical well bore; the municipalities adjacent to the well; all surface landowners and water purveyors, whose water supplies are within 1,000 feet of the proposed well location or, in the case of an unconventional well, within 3,000 feet of the proposed unconventional vertical well bore; storage operators within 3,000 feet of the proposed unconventional vertical well bore; the owner and lessee of any coal seams; and each coal operator required to be identified on the well permit application.

(b.1) Notification.--The applicant shall submit proof of notification with the well permit application. Notification of surface owners shall be performed by sending notice to those persons to whom the tax notices for the surface property are sent, as indicated in the assessment books in the county in which the property is located. Notification of surface landowners or water purveyors shall be on forms, and in a manner prescribed by the department, sufficient to identify the rights afforded those persons under section 3218 (relating to protection of water supplies) and to advise them of the advantages of taking their own predrilling or prealteration survey.

(b.2) Approval.--If the applicant submits to the department written approval of the proposed well location by the surface landowner and the coal operator, lessee or owner of any coal underlying the proposed well location and no objections are raised by the department within 15 days of filing, or if no approval has been submitted and no objections are made to the proposed well location within 15 days from receipt of notice by the department, the surface landowner or any coal operator, lessee or owner, the written approval shall be filed and become a permanent record of the well location, subject to inspection at any time by any interested person. The application form to operate an abandoned or orphan well shall provide notification to the applicant of its responsibilities to plug the well upon abandonment.

(c) Applicants.--If the applicant for a well permit is a corporation, partnership or person that is not a resident of this Commonwealth, the applicant shall designate the name and address of an agent for the operator who shall be the attorney-in-fact for the operator and who shall be a resident of this Commonwealth upon whom notices, orders or other communications issued under this chapter may be served and upon whom process may be served. Each well operator required to designate an agent under this section shall, within five days after termination of the designation, notify the department of the termination and designate a new agent.

(d) Permit fee.--Each application for a well permit shall be accompanied by a permit fee, established by the Environmental Quality Board, which bears a reasonable relationship to the cost of administering this chapter.

(e) Issuance of permit.--The department shall issue a permit within 45 days of submission of a permit application unless the department denies the permit application for one or more of the reasons set forth in subsection (e.1), except that the department shall have the right to extend the period for 15 days for cause shown upon notification to the applicant of the reasons for the extension. The department may impose permit terms and conditions necessary to assure compliance with this chapter or other laws administered by the department.

(e.1) Denial of permit.--The department may deny a permit for any of the following reasons:

(1) The well site for which a permit is requested is in violation of any of this chapter or issuance of the permit would result in a violation of this chapter or other applicable law.

(2) The permit application is incomplete.

(3) Unresolved objections to the well location by the coal mine owner or operator remain.

(4) The requirements of section 3225 (relating to bonding) have not been met.

(5) The department finds that the applicant, or any parent or subsidiary corporation of the applicant, is in continuing violation of this chapter, any other statute administered by the department, any regulation promulgated under this chapter or a statute administered by the department or any plan approval, permit or order of the department, unless the violation is being corrected to the satisfaction of the department. The right of the department to deny a permit under this paragraph shall not take effect until the department has taken a final action on the violations and:

(i) the applicant has not appealed the final action in accordance with the act of July 13, 1988 (P.L.530, No.94), known as the Environmental Hearing Board Act; or

(ii) if an appeal has been filed, no supersedeas has been issued.

(6) The applicant failed to pay the fee or file a report under section 2303(c) (relating to administration), unless an appeal is pending. The commission shall notify the department of any applicant who has failed to pay the fee or file a report and who does not have an appeal pending.

(f) Drilling.--

(1) Upon issuance of a permit, the well operator may drill, operate or alter at the exact location shown on the plat after providing the department, the surface landowner and the local political subdivision in which the well is to be located 24 hours' notice of the date that drilling will commence. Notification to the department must be provided electronically. If there is a break in drilling of 30 days or more, the well operator shall notify the department at least 24 hours prior to the resumption of drilling.

(2) The unconventional well operator shall provide the department 24 hours' notice prior to cementing all casing strings, conducting pressure tests of the production casing, stimulation and abandoning or plugging an unconventional well.

(3) In noncoal areas where more than one well is to be drilled as part of the same development project, only the first well of the project need be located by survey. Remaining wells of the project shall be shown on the plat in a manner prescribed by regulation.

(4) Prior to drilling each additional project well, the well operator shall notify the department and provide reasonable notice of the date on which drilling will commence.

(5) Whenever, before or during the drilling of a well not within the boundaries of an operating coal mine, the well operator encounters conditions of a nature which renders drilling of the bore hole or a portion thereof impossible, or more hazardous than usual, the well operator, upon verbal notice to the department, may immediately plug all or part of the bore hole, if drilling has occurred, and commence a new bore hole not more than 50 feet from the old bore hole if the location of the new bore hole does not violate section 3215 (relating to well location restrictions) and, in the case of a well subject to act of July 25, 1961 (P.L.825, No.359), known as the Oil and Gas Conservation Law, if the new location complies with existing laws, regulations and spacing orders and the new bore hole is at least 330 feet from the nearest lease boundary.

(6) Within ten days of commencement of the new bore hole, the well operator shall file with the department a written notice of intention to plug, a well record, a completion report, a plugging certificate for the original bore hole and an amended plat for the new bore hole.

(7) The well operator shall forward a copy of the amended plat to the surface landowner identified on the well permit application within ten days of commencement of the new well bore.

(g) Posting.--The well permit number and operator's name, address and telephone number shall be conspicuously posted at the drilling site during site preparation, including the construction of access roads, construction of the well site and during drilling, operating or alteration of the well.

(h) Labeling.--The well operator shall install the permit number issued by the department in a legible, visible and permanent manner on the well upon completion.

(i) Expiration.--Well permits issued for drilling wells under this chapter shall expire one year after issuance unless operations for drilling the well are commenced within the period and pursued with due diligence or unless the permit is renewed in accordance with regulations of the department. If drilling is commenced during the one-year period, the well permit shall remain in force until the well is plugged in accordance with section 3220 (relating to plugging requirements) or the permit is revoked. A drilling permit issued prior to April 18, 1985, for a well which is an operating well on April 18, 1985, shall remain in force as a well permit until the well is plugged in accordance with section 3220.

(j) Exceptions.--The Environmental Quality Board may establish by regulation certain categories of alterations of permitted or registered wells for which permitting requirements of this section shall not apply. A well operator or owner who proposes to conduct the alteration activity shall first obtain a permit or registration modification from the department. The Environmental Quality Board shall promulgate regulations as to the requirements for modifications.

(k) No transfer permitted.--No permit issued under this section or registration issued under section 3213 (relating to well registration and identification) may be transferred without prior approval of the department. A request for approval of a transfer shall be on the forms, and in the manner, prescribed by the department. The department shall approve or deny a transfer request within 45 days of receipt of a complete and accurate application. The department may deny a request only for reasons set forth in subsection (e.1)(4) and (5). Approval of a transfer request shall permanently transfer responsibility to plug the well under section 3220 to the recipient of the transferred permit or registration.

(l) Regulations.--The Environmental Quality Board may establish by regulation requirements for the permitting and operation of abandoned or orphan wells. A person who proposes to conduct abandoned or orphan well operations shall first obtain a permit to operate an abandoned or orphan well.

(m) Water management.--The following shall apply to water management:

(1) No person may withdraw or use water from water sources within this Commonwealth for the drilling or hydraulic fracture stimulation of any natural gas well completed in an unconventional gas formation, whether on or off of the land where the gas well is located, except in accordance with a water management plan approved by the department.

(2) The department shall review and approve water management plans based upon a determination that the proposed withdrawal, when operated in accordance with the proposed withdrawal operating conditions set forth in the plan, including conditions relating to quantity, withdrawal rate and timing and any passby flow conditions, will:

(i) not adversely affect the quantity or quality of water available to other users of the same water sources;

(ii) protect and maintain the designated and existing uses of water sources;

(iii) not cause adverse impact to water quality in the watershed considered as a whole; and

(iv) include a reuse plan for fluids that will be used to hydraulically fracture wells.

(3) As to criteria:

(i) The criteria under paragraph (2) shall be presumed to be achieved if the proposed water withdrawal has been approved by and is operated in accordance with conditions established by the Susquehanna River Basin Commission, the Delaware River Basin Commission or the Great Lakes Commission, as applicable.

(ii) Notwithstanding subparagraph (i), the department may establish additional requirements as necessary to comply with the laws of this Commonwealth.

(4) In addition to the requirements under paragraphs (1), (2) and (3), compliance with a department-approved water management plan shall be a condition of any permit issued under this chapter for the drilling or hydraulic fracture stimulation of any natural gas well completed in an unconventional formation and shall be deemed to satisfy the laws of this Commonwealth.

§ 3212. Permit objections.

(a) General rule.--If a well referred to in section 3211(b) (relating to well permits) will be located on a tract whose surface is owned by a person other than the well operator, the surface landowner affected shall be notified of the intent to drill and may file objections, in accordance with section 3251 (relating to conferences), based on the assertion that the well location violates section 3215 (relating to well location restrictions) or that information in the application is untrue in any material respect, within 15 days of the receipt by the surface owner of the plat under section 3211(b). Receipt of notice by the surface owner shall be presumed to have occurred 15 days from the date of the certified mailing when the well operator submits a copy of the certified mail receipt sent to the surface owner and an affidavit certifying that the address of the surface owner to which notice was sent is the same as the address listed in the assessment books in the county where the property is located. If no objection is filed or none is raised by the department within 15 days after receipt of the plat by the surface landowner or if written approval by the surface landowner is filed with the department and no objection is raised by the department within 15 days of filing, the department shall proceed to issue or deny the permit.

(b) Special circumstances.--If a well referred to in section 3211(b) will penetrate within the outside coal boundaries of an operating coal mine or a coal mine already projected and platted but not yet being operated, or within 1,000 linear feet beyond those boundaries, and, in the opinion of the coal owner or operator, the well or a pillar of coal about the well will unduly interfere with or endanger the mine, the coal owner or operator affected may file objections under section 3251 to the proposed location within 15 days of the receipt by the coal operator of the plat under section 3211(b). If possible, an alternative location at which the proposed well could be drilled to overcome the objections shall be indicated. If no objection to the proposed location is filed or if none is raised by the department within 15 days after receipt of the plat by the coal operator or owner or if written approval by the coal operator or owner of the location is filed with the department and no objection is raised by the department within 15 days of filing, the department shall proceed to issue or deny the permit.

(c) Procedure upon objection.--If an objection is filed by a coal operator or owner or made by the department, the department shall fix a time and place for a conference under section 3251 not more than ten days from the date of service of the objection to allow the parties to consider the objection and attempt to agree on a location. If they fail to agree, the department, by an appropriate order, shall determine a location on the tract of land as near to the original location as possible where, in the judgment of the department, the well can be safely drilled without unduly interfering with or endangering the mine as defined in subsection (b). The new location agreed upon by the parties or determined by the department shall be indicated on the plat on file with the department and become a permanent record upon which the department shall proceed to issue or deny the permit.

(d) Survey.--Within 120 days after commencement of drilling operations, the coal operator shall accurately locate the well by a closed survey on the same datum as the mine workings or coal boundaries are mapped, file the results of the survey with the department and forward a copy by certified mail to the well operator.

§ 3212.1. Comments by municipalities and storage operators.

(a) Municipalities.--The municipality where the tract of land upon which the unconventional well to be drilled is located may submit written comments to the department describing local conditions or circumstances which the municipality has determined should be considered by the department in rendering its determination on the unconventional well permit. A comment under this subsection must be submitted to the department within 15 days of the receipt of the plat under section 3211(b) (relating to well permits). The municipality shall simultaneously forward a copy of its comments to the permit applicant and all other parties entitled to a copy of the plat under section 3211(b), who may submit a written response. A written response must be submitted to the department within ten days of receipt of the comments of the municipality.

(a.1) Storage operators.--A storage operator located within 3,000 feet of a proposed unconventional vertical well bore may submit written comments to the department describing circumstances which the storage operator has determined should be considered by the department in rendering its determination on the unconventional well permit. A comment under this subsection must be submitted to the department within 15 days of the receipt of the plat under section 3211(b). The storage operator shall simultaneously forward a copy of its comments to the permit applicant and all other parties entitled to a copy of the plat under section 3211(b), who may submit a written response. A written response must be submitted to the department within ten days of receipt of the comments of the storage operator.

(b) Consideration by department.--Comments and responses under subsections (a) and (a.1) may be considered by the department in accordance with section 3215(d) (relating to well location restrictions).

(c) No extension of time period.--The process outlined in this section shall not extend the time period for the issuance or denial of a permit beyond the time period set forth in this chapter.

§ 3213. Well registration and identification.

(a) General rule.--On or before July 5, 1996, each person who owned or operated a well in existence prior to April 18, 1985, which has not been registered with the department and for which no drilling permit has been issued by the department, shall register the well with the department. A well owner or operator who registers under this subsection and a well owner or operator who has previously registered a well under this chapter shall, on or before July 5, 1996, identify any abandoned well on property which the well owner or operator owns or leases and request approval from the department for classification of the well as an orphan well. Information regarding wells to be registered or identified shall be provided on a form, or in a manner prescribed by the department, and shall include:

(1) The name and address of the well operator and, if the well operator is a corporation, partnership or person nonresident of this Commonwealth, the name and address of an agent for the operator upon whom notices, orders, process or other communications issued under this chapter may be served.

(2) The well name and the location of the well indicated by a point on a 7 1/2 minute United States Geological Survey topographic map or any other location description sufficient to enable the department to locate the well on the ground.

(3) The approximate date of drilling and completing the well, its approximate depth and producing horizons, well construction information and, if available, driller's logs.

(4) An indemnity bond, an alternative fee in lieu of bonding or other evidence of financial security submitted by the well operator and deemed appropriate by the department and satisfying the requirements of section 3225 (relating to bonding). No bond, alternative fee or other evidence of financial security shall be required for identification of an orphan well. For wells d