State Forest Natural Gas Leasing Provisions Adopted

The Senate tonight amended Senate Bill 1042 (Browne-R-Lehigh) with Fiscal Code changes designed to implement part of the Budget III agreement reached this afternoon. (click here for amendment)
A provision in the bill (page 16) requires the leasing of enough State Forest land for natural gas drilling over the next several years to generate $60 million in FY 2009-10 and $180 million in FY 2010-11.
Beginning in FY 2012-13, transferring 15 percent (up to $50 million) of the revenue in the Oil and Gas Fund administered by the Department of Conservation and Natural Resources to municipalities affected by Marcellus Shale drilling. A separate piece of legislation is needed to implement this provision.
Another provision says the General Assembly will appropriate the money in the Oil and Gas Fund for DCNR's use. It appropriates $30 million annually from the Fund for DCNR's use starting in FY 2010-11.
The legislation sets a minimum bid of $2,500 per acre and a minimum royalty payment of 16 percent for the market value of gas generated from State Forest land leases.
That means a minimum of 24,000 acres must be leased in FY 2009-10 and 72,000 acres in FY 2010-11.
The bill also includes these additional provisions--
-- Language to fix a technical issues allowing the Commonwealth to actually float the $400 million bond issued approved by voters in November 2008 for water infrastructure projects;
-- Authorizing the Department of Environmental Protection to charge fees of up to $150 to applicants applying for funds under the Alternative Energy Investment Act of 2008; and
-- Eliminates funding to DEP for the Consumer Energy Program for FY 2009-10.
The Senate is expected to take a final vote on Senate Bill 1042 Tuesday.