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Commissioners act on gas well ‘impact fees’

February 28, 2012

SMETHPORT – McKean County and its municipalities soon will be reaping the benefits of “impact fees” assessed on Marcellus Shale and Utica Shale natural gas wells.
Acting Tuesday at a meeting at the courthouse in Smethport, the county Board of Commissioners agreed to advertise the ordinance that sets the fees on wells drilled in the county. The ordinance is based on state legislation finalized earlier this month.
Commissioners Joe DeMott, Al Pingie and Cliff Lane endorsed the ordinance, which is expected to be officially adopted by the county board at its meeting March 20.
“It will bring a lot of money back to the county,” DeMott said in reference to the “impact fees” on the gas wells. He said the fees would be a “real boon” to the county’s townships to help them “fix roads.”
Pingie said the fees would be a “windfall” for the county.
“It’s something that is needed to help townships maintain roads and bridges,” Lane said.
The minimum first-year fee per well is $40,000. Wells drilled in previous years are included in the fee schedule, which runs for a 15-year period.
The fee is based upon the year of the well and the average price of natural gas.
The minimum fee drops to $30,000 in the second year and to $25,000 in the third year. For years four through 10, the minimum fee is $10,000. For years 11 through 15, the minimum fee is $5,000.
The first fees are due by Sept. 1 and could be distributed to the county and municipalities later this year.
The county and its municipalities will share in only a portion of the revenue collected by the fees. It appears that conservation districts and various state agencies will share in a 40 percent piece of the pie.
Some of the other 60 percent will go to the Housing Affordability and Rehabilitation Enhancement Fund to “increase the availability of quality, safe, affordable housing for low and moderate-income individuals or families and for rental assistance.”
The balance of revenue from the “impact fees” will be dispersed under the following formula:
*36 percent to the county.
*37 percent to municipalities with Marcellus Shale wells.
*13.5 percent to municipalities with wells and municipalities within five miles of a well.
See full article by purchasing the Feb. 29 edition of The Kane Republican.

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