PA Environment Digest Blog: Final State Budget Includes $50 Million For Clean Streams Fund; New SPEED Permit Review Program; Support For DEP Oil & Gas Program

The final state budget includes a $50 million transfer to the Clean Streams Fund created in 2022 to support the Agriculture Conservation Assistance Program and projects to reduce water pollution from abandoned mines and urban/suburban runoff.

A new SPEED third party permit review program paid for by applicants is established for air quality, and individual and general Chapter 102 erosion and sedimentation and Chapter 105 water encroachment permits.

The budget also includes funding for some of the permitting process improvement initiatives proposed by Gov. Shapiro and the Oil and Gas Regulatory Program to compensate in part for a significant drop off in new oil and gas permit applications that fund the program.

Also enacted with the budget--

-- Small Water/Sewer System Grants: $50 million in grants for the PA Small Water and Sewer Program administered by the Commonwealth Financing Authority is part of a new $500 million bond issue authorized under a new Pennsylvania Strategic Investments economic development program. [Fiscal Code bill].

-- Agricultural Innovation: $10 million grant program to support innovations in energy efficiency, water quality, reduced water consumption and odors. [Fiscal Code bill]

-- Solar Schools: $25 million grant program to fund solar energy facilities at schools created in House Bill 1032 (Fiedler-D-Philadelphia) [Senate Summary & Fiscal Note] Read more here.

-- Geologic Sequestration: Senate Bill 831 (Yaw-R-Lycoming) establishing a framework for authorizing the geologic sequestration of carbon dioxide through injection wells. Read more here.

-- EV Vehicle Tax: New tax on electric and plug-in hybrid cars established in Senate Bill 656 (Rothman-R- Cumberland) [Senate Summary & Fiscal Note].

Clean Streams Fund

The $50 million allocated to the Clean Streams Fund is required to be a transfer that happens annually. [Tax Code bill]

The Clean Streams Fund distribution of monies is changed [Fiscal Code bill] to--

-- 71.5% (from 70%) to State Conservation Commission

-- 12% (from 10%) to PennVEST

-- 10% to Nutrient Management Fund

-- 4% to DEP for Stormwater Management Grants

-- 0.5% (from 4%) to DCNR for Keystone Tree Restricted Account

-- 2% for Abandoned Mine Drainage Abatement

Agricultural Innovation Grants

A new $10 million Agricultural Innovation Grant Program supports innovations in energy efficiency, water quality, reduced water consumption and odors. [Fiscal Code bill]

The grant are for the following uses--

-- Planning Grants – to develop strategic plans to improve agricultural practices, technologies or operation within a specific business, geographic area or network;

-- On-Site Project Grants – to implement practices, technologies or approaches on an individual farm or property producing or processing an agricultural commodity; and

-- Regional Impact Project Grants – to address challenges, promote efficiencies or achieve specific goals for multiple applicants.

SPEED Permit Review Program

The SPEED (Streamlining Permits for Economic Expansion and Development Program) is established in the Fiscal Code bill.

The following summary was provided by the Senate Democratic Appropriations Committee--.

-- The SPEED program will provide the Department of Environmental Protection with staff augmentation by allowing third party review of air permit plan approvals (PA Code Chapter 127), earth disturbance permits (PA Code Chapter 102), and water obstruction and encroachment permits (PA Code Chapter 105).

-- The DEP will issue an RFP to identify qualified professionals and to forward application review to those professionals upon an applicant’s request. The qualified professional must meet several criteria to participate in the program and must not have any conflict of interest related to an applicant or a project. An applicant must pay for any cost associated with the qualified professional’s review of a permit application.

-- Once DEP receives the recommendations from the qualified professional, it conducts a final review according to its regulations and procedures and either issues the permit, denies it, or sends a technical deficiency letter to the applicant to tell them what they need to change in order to be compliant. Once issues in the application are resolved, DEP issues the permit; if they aren’t or can’t be resolved, DEP denies.

-- The Program relies on timelines established within the Permit Decision Guarantee Policy established in the Corbett administration, these timelines are the same as the timelines in the PAyback program, ranging from 43 business days for an Erosion and Sediment General Permit to 150 business days for a Major Facility Air Plan Approval. The applicant and department can also separately establish a timeline by agreement if they prefer. If DEP doesn’t make a decision about whether to issue the permit or deny it within the timeline, the application is immediately elevated for priority review and the department has a final 10 business days to make a decision.

-- At the end of the priority review 10 days, if a decision hasn’t been made, DEP has to pay the Qualified Professional’s costs of the review as well as refund the permit application fee (which would have happened anyway under PAyback). The failure to issue the permit may also be appealed to the Environmental Hearing Board.

-- In addition, the Program requires DEP to create a secure tracking system for applications submitted electronically on the department's website within 180 days of the passage of the bill (as long as funding is provided).

DEP Highlights

-- $10.5 million to fund permitting process/activities initiative: increase in permitting staff at regional offices across the Commonwealth and to upgrade, improve, and modernize permitting IT systems [Budget bill]

-- $5 million is transferred from the DEP Waste Transportation Safety Account to the Well Plugging Account to support the operation of the DEP Oil & Gas Regulatory Program [Fiscal Code bill] [Read more about Oil & Gas funding issues.]

-- $1.5 million for PFAS ‘forever chemical’ testing [Budget bill]

-- $9.9 million transferred to the Environmental Stewardship (Growing Greener) Fund to pay debt service on Growing Greener II bond issue [Fiscal Code bill]

-- Prohibits transferring funds from DCNR’s Oil & Gas Lease Fund to the Marcellus Legacy Fund and on to the Environmental Stewardship (Growing Greener) Fund to pay for Growing Greener II bond issue debt service for the sixth year. [Fiscal Code bill]

DCNR Highlights

-- Uses $67.79 million from the Oil & Gas Lease Fund to support DCNR operations, $120.79 million less than in FY 2023-24. [Budget bill]

-- DCNR in-lieu of tax payments are increased from $2.40 to $3 per acre with the increase paid for from State Gaming (Gambling) Funds. Future increases adjusted based on Consumer Price Index. [Fiscal Code bill]

-- Game and Fish & Boat Commission in-lieu of tax payments increased by the same amount with the increase paid for from State Gaming (Gambling) Funds. [Fiscal Code bill]

Solar Energy

The Solar for Schools Program created in House Bill 1032 (Fiedler-D-Philadelphia) [Senate Summary & Fiscal Note] receives a $25 million appropriation for FY 2024-25. [Fiscal Code bill]. Read more here.

Section 1724-H of the Fiscal Code bill prohibits DEP from using federal money from the Inflation Reduction Act for the Solar for All program unless it is authorized by state law after the effective date of the act. [Fiscal Code bill, page 76]

Authorizing Geologic Sequestration Of Carbon Dioxide

On July 11, the House-- by a vote of 127 to 75-- and the Senate-- by a vote of 37 to 12-- passed and sent to the Governor Senate Bill 831 (Yaw-R- Lycoming) establishing a framework for authorizing the geologic sequestration of carbon dioxide through injection wells. Read more here.

Cryptocurrency/Coal Waste Tax Credit

-- Prohibits the use of the state data center tax credit for cryptocurrency mining operations [Tax Code bill]

-- The Coal Refuse Energy and Reclamation Tax Credit was increased from $20 million to $55 million annually. [Tax Code bill]

Electric/Plug-In Hybrid Vehicle Tax

The Senate and House gave final approval to Senate Bill 656 (Rothman-R-Cumberland) establishing a new tax on electric and plug-in hybrid vehicles that is now on its way to the Governor. [Senate Summary & Fiscal Note]

The bill also eliminates the Alternative Fuels Tax on Electricity for residential charging.

Mineral Rights Owner Tax Break

Owners of oil and gas, coal, industrial minerals and other mineral rights will get a $7.2 million tax break on their personal income taxes as a result of aligning Pennsylvania’s depletion allowances with the federal Tax Code. [Tax Code bill] Read more here from Sen. Bartolotta.

[NOTE: This post will be updated as new information becomes available.]

Budget Documents:

-- House Democratic FY 2024-25 Budget Summary

-- Senate Democratic Fiscal Code Bill Summary

-- FY 2024-25 Budget Spreadsheet

State Budget bills--

-- General Fund: Senate Bill 1001 [House Summary & Fiscal Note]

-- Fiscal Code: House Bill 2310 [Senate Summary & Fiscal Note]

-- Tax Code: Senate Bill 654 [Senate Summary & Fiscal Note]

Resource Link:

-- Click Here for Governor’s Original Proposed Budget.