Governor's Budget Office Takes $138.5 Million From Act 13 Drilling Impact Fee, Marcellus Legacy Fund, Farmland Preservation Fund, Underground Storage Tank Insurance Fund To Balance State Budget

On August 31, the Governor's Budget Office notified the State Treasurer to take $580 million from 11 special funds-- including 4 environment-related funds-- the Secretary of the Budget chose to balance the state budget as directed in the state budget Fiscal Code bill-- Senate Bill 146 (page 182).

The environment-related funds include--

-- PUC Act 13 Drilling Impact Fee Unconventional Gas Well Fund supporting communities impacted by shale gas drilling: $15 million [Reduces total Act 13 fee benefits from $243.8 million to $228.8 million for distribution]

-- Marcellus Legacy Fund To Support Environmental Restoration Programs: $2 million [Reduces available funds from approximately $96.4 million to $94.4 million]

-- Agricultural Conservation Easement Purchase Fund: $11.5 million [reduces available funds from approximately $101.9 million to $90.4 million]

-- Underground Storage Tank Indemnification Insurance Fund: $110 million [supported by a tax on gasoline to pay for storage tank cleanup insurance]

These transfers were first disclosed by the Pennsylvania Petroleum Association.

Click Here for a copy of the transfer request.

DEP Oil & Gas Budget Transfers

On September 1, the Department of Environmental Protection told the DEP Citizens Advisory Council the new state budget forces DEP to take money from seven other DEP environmental programs to keep the Oil and Gas Regulatory Program running.

Ian Harlow, DEP Deputy for Administration, said the state budget Fiscal Code bill-- Senate Bill 146 (page 181)-- authorized the transfer of more than $19 million to pay the administrative costs of the Oil and Gas Program.

Harlow said DEP tentative plans to pull about $14 million from these programs--

-- $5 million from the Alternative Fuels Incentive Grant Fund

-- $3 million from the Coal Refuse Disposal Control Fund

-- $1.5 million from the Industrial Land Recycling Fund

-- $1.5 million from Solid Waste Abatement Fund

-- $500,000 from the Dams And Encroachment Fund

-- $500,000 from the Waste Haulers Transportation Security Account

-- $500,000 from the Used Tire Pile Remediation Account

Harlow said the budget directs the money would have to come from one of nine DEP programs listed in the bill, not from the General Fund like happened in other years.

[Note: Revenue from oil and gas permit application fees-- which support the administrative costs of the Oil and Gas Program-- have been woefully inadequate the last three years to support permitting and enforcement costs due to the continuing slowdown of the shale gas and conventional oil and gas industry.

[In the FY 2025-2026 budget, DEP received $15 million in General Fund money and in FY 2024-2025 received another $5 million in General Fund money to pay enforcement and permitting staff and program costs.]

(Photo: Signing ceremony for FY 2026-27 state budget.)

Resource Links:

-- State Budget Brief: DEP Oil & Gas Program Enforcement & Permitting Staff Has Been Frozen For Last 10 Years, Meanwhile Drilled Shale Gas Wells Increased By Nearly 50%  [PaEN] 

-- Budget First Look: At Best A Cost-To-Carry Environmental Budget, Supports Oil & Gas Program Operations, Minor Data Center Provisions But No Moratorium Or Pause, Sales Tax Exemption For Data Centers Stays [PaEN] 

[Posted: September 8, 2026]  PA Environment Digest