OIL AND GAS

Title 58

58cc

TABLE=20 OF CONTENTS

TITLE=20 58

OIL=20 AND GAS

PART=20 I. (RESERVED)

PART=20 II. OVERSIGHT AND DEVELOPMENT

Chapter=20 23. Unconventional Gas Well Fee

=C2=A7=20 2301. Definitions.

=C2=A7=20 2302. Unconventional gas well fee.

=C2=A7=20 2303. Administration.

=C2=A7=20 2304. Well information.

=C2=A7=20 2305. Duties of department.

=C2=A7=20 2306. (Reserved).

=C2=A7=20 2307. Commission.

=C2=A7=20 2308. Enforcement.

=C2=A7=20 2309. Enforcement orders.

=C2=A7=20 2310. Administrative penalties.

=C2=A7=20 2311. (Reserved).

=C2=A7=20 2312. Recordkeeping.

=C2=A7=20 2313. Examinations.

=C2=A7=20 2314. Distribution of fee.

=C2=A7=20 2315. Statewide initiatives.

=C2=A7=20 2316. Small business participation.

=C2=A7=20 2317. Applicability.

=C2=A7=20 2318. Expiration.

Chapter=20 25. Oil and Gas Lease Fund

=C2=A7=20 2501. Definitions.

=C2=A7=20 2502. (Reserved).

=C2=A7=20 2503. (Reserved).

=C2=A7=20 2504. Appropriation of money.

=C2=A7=20 2505. Funds.

Chapter=20 27. Natural Gas Energy Development Program

=C2=A7=20 2701. Definitions.

=C2=A7=20 2702. Assistance.

=C2=A7=20 2703. Program.

=C2=A7=20 2704. Expiration.

PART=20 III. UTILIZATION

Chapter=20 31. (Reserved)

Chapter=20 32. Development

Subchapter=20 A. Preliminary Provisions

=C2=A7=20 3201. Scope of chapter.

=C2=A7=20 3202. Declaration of purpose of chapter.

=C2=A7=20 3203. Definitions.

Subchapter=20 B. General Requirements

=C2=A7=20 3211. Well permits.

=C2=A7=20 3212. Permit objections.

=C2=A7=20 3212.1. Comments by municipalities and storage operators.

=C2=A7=20 3213. Well registration and identification.

=C2=A7=20 3214. Inactive status.

=C2=A7=20 3215. Well location restrictions.

=C2=A7=20 3216. Well site restoration.

=C2=A7=20 3217. Protection of fresh groundwater and casing=20 requirements.

=C2=A7=20 3218. Protection of water supplies.

=C2=A7=20 3218.1. Notification to public drinking water systems.

=C2=A7=20 3218.2. Containment for unconventional wells.

=C2=A7=20 3218.3. Transportation records regarding wastewater = fluids.

=C2=A7=20 3218.4. Corrosion control requirements.

=C2=A7=20 3218.5. Gathering lines.

=C2=A7=20 3219. Use of safety devices.

=C2=A7=20 3219.1. Well control emergency response.

=C2=A7=20 3220. Plugging requirements.

=C2=A7=20 3221. Alternative methods.

=C2=A7=20 3222. Well reporting requirements.

=C2=A7=20 3222.1. Hydraulic fracturing chemical disclosure = requirements.

=C2=A7=20 3223. Notification and effect of well transfer.

=C2=A7=20 3224. Coal operator responsibilities.

=C2=A7=20 3225. Bonding.

=C2=A7=20 3226. Oil and Gas Technical Advisory Board.

=C2=A7=20 3227. Air contaminant emissions.

Subchapter=20 C. Underground Gas Storage

=C2=A7=20 3231. Reporting requirements for gas storage = operations.

=C2=A7=20 3232. Reporting requirements for coal mining = operations.

=C2=A7=20 3233. General gas storage reservoir operations.

=C2=A7=20 3234. Gas storage reservoir operations in coal = areas.

=C2=A7=20 3235. Inspection of facilities and records.

=C2=A7=20 3236. Reliance on maps and burden of proof.

=C2=A7=20 3237. Exemptions and prohibitions.

Subchapter=20 D. Eminent Domain

=C2=A7=20 3241. Appropriation of interest in real property.

Subchapter=20 E. Enforcement and Remedies

=C2=A7=20 3251. Conferences.

=C2=A7=20 3252. Public nuisances.

=C2=A7=20 3253. Enforcement orders.

=C2=A7=20 3254. Restraining violations.

=C2=A7=20 3254.1. Well control emergency response cost recovery.

=C2=A7=20 3255. Penalties.

=C2=A7=20 3256. Civil penalties.

=C2=A7=20 3257. Existing rights and remedies preserved and = cumulative=20 remedies authorized.

=C2=A7=20 3258. Inspection and production of materials, = witnesses,=20 depositions and rights of entry.

=C2=A7=20 3259. Unlawful conduct.

=C2=A7=20 3260. Collection of fines and penalties.

=C2=A7=20 3261. Third party liability.

=C2=A7=20 3262. Inspection reports.

Subchapter=20 F. Miscellaneous Provisions

=C2=A7=20 3271. Well plugging funds.

=C2=A7=20 3272. (Reserved).

=C2=A7=20 3273. Effect on department authority.

=C2=A7=20 3273.1. Relationship to solid waste and surface mining.

=C2=A7=20 3274. Regulations.

Chapter=20 33. Local Ordinances Relating to Oil and Gas Operations =

=C2=A7=20 3301. Definitions.

=C2=A7=20 3302. Oil and gas operations regulated pursuant to = Chapter=20 32.

=C2=A7=20 3303. Oil and gas operations regulated by environmental = acts.

=C2=A7=20 3304. Uniformity of local ordinances.

=C2=A7=20 3305. Commission.

=C2=A7=20 3306. Civil actions.

=C2=A7=20 3307. Attorney fees and costs.

=C2=A7=20 3308. Ineligibility.

=C2=A7=20 3309. Applicability.

Chapter=20 35. Responsibility for Fee

=C2=A7=20 3501. Declaration of policy.

=C2=A7=20 3502. Prohibition.

=C2=A7=20 3503. Existing agreements.

=C2=A7=20 3504. Future agreements.

58c2301h

TITLE=20 58

OIL=20 AND GAS

Part=20

I.=20 (Reserved)

II.=20 Oversight and Development

III.=20 Utilization

Enactment.=20 Unless otherwise noted, the provisions of Title 58 were added = February 14,=20 2012, P.L.87, No.13, effective in 60 days.

Special=20 Provisions in Appendix. See sections 2, 6, 7 and 8 of Act 13 = of 2012=20 in the appendix to this title for special provisions relating to fiscal = year=20 2011-2012 appropriation, legislative intent, Department of = Transportation=20 statement of policy and pipeline placement for natural gas.

PART I

(Reserved)

Enactment.=20 Part I was added February 14, 2012, P.L.83, No.13, effective in 60 = days.

PART II

OVERSIGHT=20 AND DEVELOPMENT

Enactment.=20 Part II was added February 14, 2012, P.L.83, No.13, effective in = 60=20 days.

Chapter=20

23.=20 Unconventional Gas Well Fee

25.=20 Oil and Gas Lease Fund

27.=20 Natural Gas Energy Development Program

CHAPTER 23

UNCONVENTIONAL=20 GAS WELL FEE

Sec.=20

2301.=20 Definitions.

2302.=20 Unconventional gas well fee.

2303.=20 Administration.

2304.=20 Well information.

2305.=20 Duties of department.

2306.=20 (Reserved).

2307.=20 Commission.

2308.=20 Enforcement.

2309.=20 Enforcement orders.

2310.=20 Administrative penalties.

2311.=20 (Reserved).

2312.=20 Recordkeeping.

2313.=20 Examinations.

2314.=20 Distribution of fee.

2315.=20 Statewide initiatives.

2316.=20 Small business participation.

2317.=20 Applicability.

2318.=20 Expiration.

Enactment.=20 Chapter 23 was added February 14, 2012, P.L.83, No.13, effective=20 immediately.

Special=20 Provisions in Appendix. See section 5 of Act 13 of 2012 in the = appendix to this title for special provisions relating to application of = law.

Cross=20 References. Chapter 23 is referred to in sections 2703, 3308, = 3502 of=20 this title.

58c2301s

=C2=A7=20 2301. Definitions.

The=20 following words and phrases when used in this chapter shall have the = meanings=20 given to them in this section unless the context clearly indicates=20 otherwise:

"Average=20 annual price of natural gas." The arithmetic mean of the New = York=20 Mercantile Exchange (NYMEX) settled price for the near-month contract, = as=20 reported by the Wall Street Journal for the last trading day of each = month of a=20 calendar year for the 12-month period ending December 31.

"Company."=20 An entity doing business within this Commonwealth and subject to = tax under=20 Article III, IV or VI of the act of March 4, 1971 (P.L.6, No.2), known = as the=20 Tax Reform Code of 1971.

"Commission."=20 The Pennsylvania Public Utility Commission.

"Department."=20 The Department of Environmental Protection of the = Commonwealth.

"Eligible=20 applicant." Any of the following:

(1)=20 A county, municipality, council of governments, watershed=20 organization, institution of higher education or nonprofit = organization.

(2)=20 An authorized organization as defined in 27 Pa.C.S. =C2=A7 6103 = (relating to=20 definitions).

(3)=20 A company, other than a producer.

"Fee."=20 The unconventional gas well fee imposed under section 2302 = (relating to=20 unconventional gas well fee).

"Fund."=20 The Unconventional Gas Well Fund.

"Highway=20 mileage." The number of miles of public roads and streets most = recently certified by the Department of Transportation as eligible for=20 distribution of liquid fuels funds under the act of June 1, 1956 (1955 = P.L.1944,=20 No.655), referred to as the Liquid Fuels Tax Municipal Allocation = Law.

"Municipality."=20 A borough, city, town or township.

"Natural=20 gas." A fossil fuel consisting of a mixture of hydrocarbon = gases,=20 primarily methane, and possibly including ethane, propane, butane, = pentane,=20 carbon dioxide, oxygen, nitrogen and hydrogen sulfide and other gas = species. The=20 term includes natural gas from oil fields known as associated gas or = casing head=20 gas, natural gas fields known as nonassociated gas, coal beds, shale = beds and=20 other formations. The term does not include coal bed methane.

"Number=20 of spud unconventional gas wells." The most recent numerical = count of=20 spud unconventional gas wells on the inventory maintained and provided = to the=20 commission by the department as of the last day of each month.

"Population."=20 As follows:

(1)=20 Population of the Commonwealth and population of a county shall be = determined using the United States Census Bureau's most recently = released Annual=20 Estimates of the Resident Population for Counties of Pennsylvania.

(2)=20 Population of a municipality shall be determined using the United = States=20 Census Bureau's most recently released Annual Estimates for the Resident = Population for Incorporated Places in Pennsylvania.

(3)=20 Population of municipalities not included in the report referenced = under=20 paragraph (2) shall be determined using the United States Census = Bureau's most=20 recently released Annual Estimates of the Resident Population for Minor = Civil=20 Divisions in Pennsylvania.

"Producer."=20 A person or its subsidiary, affiliate or holding company that = holds a=20 permit or other authorization to engage in the business of severing = natural gas=20 for sale, profit or commercial use from an unconventional gas well in = this=20 Commonwealth. The term shall not include a producer that severs natural = gas from=20 a site used to store natural gas that did not originate from the = site.

"Spud."=20 The actual start of drilling of an unconventional gas well.

"Stripper=20 well." An unconventional gas well incapable of producing more = than=20 90,000 cubic feet of gas per day during any calendar month, including = production=20 from all zones and multilateral well bores at a single well, without = regard to=20 whether the production is separately metered.

"Unconventional=20 formation." A geological shale formation existing below the = base of=20 the Elk Sandstone or its geologic equivalent stratigraphic interval = where=20 natural gas generally cannot be produced at economic flow rates or in = economic=20 volumes except by vertical or horizontal well bores stimulated by = hydraulic=20 fracture treatments or by using multilateral well bores or other = techniques to=20 expose more of the formation to the well bore.

"Unconventional=20 gas well." A bore hole drilled or being drilled for the = purpose of or=20 to be used for the production of natural gas from an unconventional=20 formation.

"Vertical=20 gas well." An unconventional gas well which utilizes hydraulic = fracture treatment through a single vertical well bore and produces = natural gas=20 in quantities greater than that of a stripper well.

58c2302s

=C2=A7=20 2302. Unconventional gas well fee.

(a)=20 General rule.--The governing body of a county that has a spud=20 unconventional gas well located within its borders may elect whether to = impose a=20 fee on unconventional gas wells that have been spud in the county.

(a.1)=20 Passage of ordinance.--Within 60 days after the effective date = of this=20 section, the governing body of a county under subsection (a) may adopt = an=20 ordinance to impose an unconventional gas well fee. The governing body = of a=20 county must notify the commission and give public notice of its intent = to adopt=20 the ordinance.

(a.2)=20 County ordinance.--The ordinance imposing a fee under = subsection (a.1)=20 shall be clear and in language that is readily understandable by a = layperson and=20 shall be in the following form:

The=20 county of (insert name) hereby imposes an unconventional gas well fee on = each=20 unconventional gas well spud in this county.

(a.3)=20 Prohibition.--

(1)=20 A county subject to this section, in which the governing body does = not=20 adopt an ordinance imposing an unconventional gas well fee within 60 = days of the=20 effective date of this section, shall be prohibited from receiving funds = under=20 sections 2314(d)(1) (relating to distribution of fee) and 2315(a.1)(3) = and (5)=20 (relating to Statewide initiatives).

(2)=20 The prohibition on receiving funds shall remain in effect until = the county=20 adopts an ordinance imposing an unconventional gas well fee. The = prohibition=20 shall expire and funds may be received for the calendar year following = the=20 adoption of an ordinance imposing the fee under this section.

(a.4)=20 Alternate imposition.--

(1)=20 If the governing body of a county does not impose an = unconventional gas=20 well fee under subsection (a), the municipalities in the county may = compel the=20 imposition of an unconventional gas well fee on each unconventional gas = well=20 spud in the county by adopting resolutions under paragraphs (2), (3) and = (4).

(2)=20 Following 60 days but not more than 120 days after the effective = date of=20 this section, if the governing bodies of at least half of the = municipalities=20 located in a county or municipalities representing at least 50% of the=20 population of the county adopt resolutions to impose unconventional gas = well=20 fees on all unconventional gas wells spud in the county, the fee shall = take=20 effect. If a resolution is adopted, a copy of the resolution shall be=20 transmitted to the governing body of the county and the commission. The=20 governing body of a municipality that is located in more than one county = shall=20 transmit a copy of a resolution adopted under this paragraph to the = governing=20 body of each county in which the municipality is located.

(3)=20 The transmittal of resolutions by governing bodies under paragraph = (2)=20 shall constitute an imposition of the fee in that county. The population = of a=20 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=20 each county.

(4)=20 Resolutions adopted under this subsection must be framed in the = following=20 form:

The=20 (insert name) in the county of (insert name) hereby resolves to have the = county=20 impose an unconventional gas well fee on each unconventional gas well = spud in=20 the county.

(5)=20 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=20 resolution under paragraphs (2), (3) and (4) shall be prohibited from = receiving=20 funds under section 2314(d).

(b)=20 Components.--The fee adopted under subsection (a), (a.1) or = (a.4) is=20 imposed on every producer and shall apply to unconventional gas wells = spud in=20 this Commonwealth regardless of when spudding occurred. Unconventional = gas wells=20 spud before the fee is imposed shall be considered to be spud in = the=20 calendar year prior to the imposition of the fee for purposes of = determining the=20 fee under this subsection. Prior to adjustment under subsection (c), the = fee for=20 each unconventional gas well shall be determined as follows:

(1)=20 Year one:

(i)=20 If the average annual price of natural gas is not more than $2.25, = the fee=20 shall be $40,000 for the calendar year in which the unconventional gas = well is=20 spud.

(ii)=20 If the average annual price of natural gas is greater than = $2.25 and=20 less than $3.00, the fee shall be $45,000 for the calendar year in which = the=20 unconventional gas well is spud.

(iii)=20 If the average annual price of natural gas is greater than = $2.99 and=20 less than $5.00, the fee shall be $50,000 for the calendar year in which = the=20 unconventional gas well is spud.

(iv)=20 If the average annual price of natural gas is greater than = $4.99 and=20 less than $6.00, the fee shall be $55,000 for the calendar year in which = the=20 unconventional gas well is spud.

(v)=20 If the average annual price of natural gas is more = than $5.99,=20 the fee shall be $60,000 for the calendar year in which the = unconventional gas=20 well is spud.

(2)=20 Year two:

(i)=20 If the average annual price of natural gas is not more than $2.25, = the fee=20 shall be $30,000 for the calendar year following the year in which the=20 unconventional gas well is spud.

(ii)=20 If the average annual price of natural gas is greater than = $2.25 and=20 less than $3.00, the fee shall be $35,000 for the calendar year = following the=20 year in which the unconventional gas well is spud.

(iii)=20 If the average annual price of natural gas is greater than = $2.99 and=20 less than $5.00, the fee shall be $40,000 for the calendar year = following the=20 year in which the unconventional gas well is spud.

(iv)=20 If the average annual price of natural gas is greater than = $4.99 and=20 less than $6.00, the fee shall be $45,000 for the calendar year = following the=20 year in which the unconventional gas well is spud.

(v)=20 If the average annual price of natural gas is more than = $5.99, the=20 fee shall be $55,000 for the calendar year following the year in which = the=20 unconventional gas well is spud.

(3)=20 Year three:

(i)=20 If the average annual price of natural gas is not more than $2.25, = the fee=20 shall be $25,000 for the second calendar year following the year in = which the=20 unconventional gas well is spud.

(ii)=20 If the average annual price of natural gas is greater than = $2.25 and=20 less than $3.00, the fee shall be $30,000 for the second calendar year = following=20 the year in which the unconventional gas well is spud.

(iii)=20 If the average annual price of natural gas is greater than = $2.99 and=20 less than $5.00, the fee shall be $30,000 for the second calendar year = following=20 the year in which the unconventional gas well is spud.

(iv)=20 If the average annual price of natural gas is greater than = $4.99 and=20 less than $6.00, the fee shall be $40,000 for the second calendar year = following=20 the year in which the unconventional gas well is spud.

(v)=20 If the average annual price of natural gas is more than $5.99, the = fee=20 shall be $50,000 for the second calendar year following the year in = which the=20 unconventional gas well is spud.

(4)=20 Years 4, 5, 6, 7, 8, 9 and 10:

(i)=20 If the average annual price of natural gas is not more than $2.25, = the fee=20 shall be $10,000 for the third through ninth calendar years following = the year=20 in which the unconventional gas well is spud.

(ii)=20 If the average annual price of natural gas is greater than = $2.25 and=20 less than $3.00, the fee shall be $15,000 for the third through ninth = calendar=20 years following the year in which the unconventional gas well is = spud.

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

(5)=20 Years 11, 12, 13, 14 and 15:

(i)=20 If the average annual price of natural gas is less than $3.00, the = fee=20 shall be $5,000 for the 10th through 14th calendar years following the = year in=20 which the unconventional well is spud.

(ii)=20 If the average annual price of natural gas is greater than $2.99, = the fee=20 shall be $10,000 for the 10th through 14th calendar years following the = year in=20 which the unconventional well is spud.

(6)=20 For purposes of this subsection, the fee shall be determined using = the=20 average annual price of natural gas for the calendar year in which the = fee is=20 imposed.

(b.1)=20 Nonproducing unconventional gas wells.--If a spud = unconventional gas=20 well begins paying the fee imposed under this section and is = subsequently capped=20 or does not produce natural gas in quantities greater than that of a = stripper=20 well within two years after paying the initial fee, then the fee shall = be=20 suspended:

(1)=20 The fee shall be reinstated for a calendar year during which the=20 unconventional gas well produces natural gas in quantities greater than = that of=20 a stripper well.

(2)=20 Each calendar year during which a fee is suspended shall not be = considered=20 a calendar year following spud for purposes of determining the amount of = the fee=20 under subsection (b).

(c)=20 Annual adjustment.--Beginning January 1, 2013, the commission = shall=20 annually adjust the fee amounts under subsection (b) to reflect any = upward=20 changes in the Consumer Price Index for all Urban Consumers for the=20 Pennsylvania, New Jersey, Delaware and Maryland area in the preceding 12 = months=20 and shall immediately submit the adjusted fee amount to the Legislative=20 Reference Bureau for publication as a notice in the Pennsylvania = Bulletin. The=20 fee shall be adjusted by multiplying the annual fee amount by any = percentage=20 increase to the Consumer Price Index for all Urban Consumers for the=20 Pennsylvania, New Jersey, Delaware and Maryland area, rounded to the = nearest=20 $100. The resultant product shall be added to the fee amount, and the = sum shall=20 become the new annual fee amount under subsection (b). The annual = adjustment=20 under this subsection shall take effect if the total number of = unconventional=20 gas wells spud in the adjustment year exceeds the total number of = unconventional=20 gas wells spud in the prior year.

(d)=20 Restimulated unconventional gas wells.--

(1)=20 An unconventional gas well which after restimulation qualifies as = a=20 stripper well shall not be subject to this subsection.

(2)=20 The year in which the restimulation occurs shall be considered the = first=20 year of spudding for purposes of imposing the fee under this section = if:

(i)=20 a producer restimulates a previously stimulated unconventional gas = well=20 following the tenth year after being spud by:

(A)=20 hydraulic fracture treatments;

(B)=20 using additional multilateral well bores;

(C)=20 drilling deeper into an unconventional formation; or

(D)=20 other techniques to expose more of the formation to the well bore; = and

(ii)=20 the restimulation results in a substantial increase in = production.

(3)=20 As used in this subsection, the term "substantial increase in = production"=20 means an increase in production amounting to more than 90,000 cubic feet = of gas=20 per day during a calendar month.

(e)=20 Cessation.--Payments of the fee shall cease upon certification = to the=20 department by the producer that the unconventional gas well has ceased=20 production and has been plugged according to the regulations established = by the=20 department.

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

58c2302v

Cross=20 References. Section 2302 is referred to in sections 2301, = 2305, 2308,=20 2314 of this title.

58c2303s

=C2=A7=20 2303. Administration.

(a)=20 Fee due date.--

(1)=20 Except as provided under paragraph (2), the fee imposed under this = chapter=20 shall be due by April 1, 2013, and each April 1 thereafter. The fee = shall become=20 delinquent if not remitted to the commission on the reporting date.

(2)=20 For wells spud before January 1, 2012, a fee imposed under this = chapter=20 shall be due by September 1, 2012.

(b)=20 Report.--By September 1, 2012, and April 1 of each year = thereafter,=20 each producer shall submit payment of the fee to the commission and a = report on=20 a form prescribed by the commission for the previous calendar year. The = report=20 shall include the following:

(1)=20 The number of spud unconventional gas wells of a producer in each=20 municipality within each county that has imposed a fee under this = chapter.

(2)=20 The date that each unconventional gas well identified under = paragraph (1)=20 was spud or ceased the production of natural gas.

(c)=20 Costs of commission.--

(1)=20 The commission may impose an annual administrative charge not to = exceed=20 $50 per spud unconventional gas well on each producer, to be paid with = the=20 submission under subsection (a), to pay for the actual costs of the = commission=20 to administer and enforce this chapter.

(2)=20 Within 30 days of the effective date of this subsection, the = commission=20 shall estimate its expenditures through June 30, 2012, that will be = directly=20 attributable to the administration and enforcement of this chapter. The=20 commission shall subtract the amount of the administrative charges = imposed under=20 paragraph (1) and assess any remaining balance on all producers subject = to the=20 administrative charge in proportion to the number of wells owned by each = producer. Producers shall pay the assessments within 30 days of receipt = of=20 notice from the commission. The amount of the assessment may be = challenged by a=20 producer consistent with 66 Pa.C.S. =C2=A7 510(c), (d) and (e) (relating = to=20 assessment for regulatory expenses upon public utilities). Any = collections that=20 exceed any of the following shall be used to offset the administrative = charges=20 or other funds received for fiscal year 2012-2013:

(i)=20 The budget amount approved by the General Assembly and the = Governor for=20 administration and enforcement of this chapter and Chapter 33 (relating = to local=20 ordinances relating to oil and gas operations).

(ii)=20 The actual expenditures directly attributable to the = administration and=20 enforcement of this chapter and Chapter 33.

(3)=20 By June 30, 2012, and each June 30 thereafter, the commission = shall=20 estimate its expenditures for the next fiscal year that will be directly = attributable to the administration and enforcement of this chapter. = After=20 subtracting any annual administrative charges imposed under paragraph = (1),=20 amounts received by the commission under section 2314(c.1)(2) (relating = to=20 distribution of fee) and any amounts collected during the prior fiscal = year that=20 exceeded actual expenditures directly attributable to the administration = and=20 enforcement of this chapter, the commission shall assess the remaining = balance=20 on all producers subject to the unconventional gas well fee in = proportion to the=20 number of wells owned by each producer. Producers shall pay the = assessments=20 within 30 days of the receipt of notice from the commission. The amount = of the=20 assessment may be challenged by a producer consistent with 66 Pa.C.S. = =C2=A7 510(c),=20 (d) and (e). Any collections that exceed any of the following shall be = used to=20 offset administrative charges or assessments for the next fiscal = year:

(i)=20 The budget amount approved by the General Assembly and the = Governor for=20 administration and enforcement of this chapter and Chapter 33.

(ii)=20 Actual expenditures directly attributable to the administration = and=20 enforcement of this chapter and Chapter 33.

58c2303v

Cross=20 References. Section 2303 is referred to in sections 2307, 3211 = of this title.

58c2304s

=C2=A7=20 2304. Well information.

(a)=20 List.--Within 14 days of the effective date of this section, = the=20 department shall provide the commission and, upon request, a county, = with a list=20 of all spud unconventional gas wells from the department. The department = shall=20 update the list and provide it to the commission on a monthly basis.

(b)=20 Updates.--A producer subject to the fee shall notify the = commission of=20 the following within 30 days after a calendar month in which the change=20 occurs:

(1)=20 The spudding of an unconventional gas well.

(1.1)=20 The initiation of production at an unconventional gas well.

(2)=20 The removal of an unconventional gas well from production.

58c2305s

=C2=A7=20 2305. Duties of department.

(a)=20 Confirmation of payment.--Prior to issuing a permit to drill = an=20 unconventional gas well in this Commonwealth, the department shall = determine=20 whether the producer has paid all fees owed for an existing = unconventional gas=20 well under section 2302 (relating to unconventional gas well fee).

(b)=20 Prohibition.--The department shall not issue a permit to drill = an=20 unconventional gas well until all unconventional gas well fees owed = under=20 section 2302 that are not in dispute have been paid to the = commission.

(c)=20 Payment of fees.--The commission shall provide the department = with=20 information necessary to determine that the producer has paid all = unconventional=20 gas well fees owed for an unconventional gas well under section = 2302.

58c2306s

=C2=A7=20 2306. (Reserved).

58c2307s

=C2=A7=20 2307. Commission.

(a)=20 Powers.--The commission shall have the authority to make all = inquiries=20 and determinations necessary to calculate and collect the fee, = administrative=20 charges or assessments imposed under this chapter, including, if = applicable,=20 interest and penalties.

(b)=20 Notice.--If the commission determines that the unconventional = gas well=20 fee has not been paid in full, it may issue a notice of the amount due = and=20 demand for payment and shall set forth the basis for the = determination.

(c)=20 Address.--Notice of failure to pay the correct fee shall be = sent to=20 the producer via certified mail.

(d)=20 Time period.--Except as set forth in subsection (e), the = commission=20 may challenge the amount of a fee paid within three years after the date = the=20 report under section 2303(b) (relating to administration) is filed.

(e)=20 Intent.--If no report is filed or a producer files a false or=20 fraudulent report with the intent to evade the fee, an assessment of the = amount=20 owed may be made at any time.

58c2307v

Cross=20 References. Section 2307 is referred to in section 2308 of = this=20 title.

58c2308s

=C2=A7=20 2308. Enforcement.

(a)=20 Assessment.--The commission shall assess interest on any = delinquent=20 fee at the rate determined under section 2307(a) (relating to = commission).

(b)=20 Penalty.--In addition to the assessed interest under = subsection (a),=20 if a producer fails to make timely payment of the fee, there shall be = added to=20 the amount of the fee due a penalty of 5% of the amount of the fee if = failure to=20 file a timely payment is for not more than one month, with an additional = 5%=20 penalty for each additional month, or fraction of a month, during which = the=20 failure continues, not to exceed 25% in the aggregate.

(c)=20 Timely payment.--If the commission determines that a producer = has not=20 made a timely payment of the fee, the commission shall send written = notice of=20 the amount of the deficiency to the producer within 30 days from the = date of=20 determining the deficiency. The commission shall notify the department = of a=20 producer that has failed to pay the fee for any unconventional gas well = under=20 section 2302 (relating to unconventional gas well fee). If the producer = does not=20 have a pending appeal related to payment of the fee in process, the = department=20 shall suspend the permit for that well until the fee has been paid.

(d)=20 Remedies.--The remedies provided under this chapter are in = addition to=20 any other remedies provided by law or in equity.

(e)=20 Lien.--Fines, fees, interest and penalties shall be = collectible as=20 authorized by law for the collection of debts. If the producer liable to = pay an=20 amount neglects or refuses to pay the amount after demand, the amount, = together=20 with costs, shall be a judgment in favor of the Commonwealth upon the = property=20 of the producer, but only after the judgment has been entered, docketed = and=20 recorded by the prothonotary of the county where the property is = situated. The=20 Commonwealth shall transmit to the prothonotaries of the respective = counties=20 certified copies of the judgments. Each prothonotary shall enter, docket = and=20 record the record in the prothonotary's office and index each judgment, = without=20 requiring the payment of costs as a condition precedent to the entry of = the=20 judgment.

58c2309s

=C2=A7=20 2309. Enforcement orders.

(a)=20 Issuance.--The commission may issue an order as necessary to = enforce=20 this chapter. An order issued under this section shall take effect upon = notice,=20 unless the order specifies otherwise. A person aggrieved by an order = under this=20 section may appeal to Commonwealth Court under 42 Pa.C.S. =C2=A7 763 = (relating to=20 direct appeals from government agencies).

(b)=20 Compliance.--A producer has the duty to comply with an order = issued=20 under subsection (a). If a producer fails to proceed diligently to = comply with=20 an order within the time required, the producer shall be guilty of = contempt and=20 shall be punished by the court in an appropriate manner. The commission = shall=20 apply to Commonwealth Court, which shall have jurisdiction over matters = relating=20 to contempt.

58c2310s

=C2=A7=20 2310. Administrative penalties.

(a)=20 Civil penalties.--In addition to any other proceeding = authorized by=20 law, the commission may assess a civil penalty not to exceed $2,500 per=20 violation upon a producer for the violation of this chapter. In = determining the=20 amount of the penalty, the commission shall consider the willfulness of = the=20 violation and other relevant factors.

(b)=20 Separate offense.--Each violation for each separate day and = each=20 violation of this chapter shall constitute a separate offense.

(c)=20 Limitation of actions.--Notwithstanding any limitation in 42 = Pa.C.S.=20 Ch. 55 Subch. B (relating to civil actions and proceedings), an action = under=20 this section must be brought within three years of the violation.

(d)=20 Procedure.--A penalty under this chapter is subject to 66 = Pa.C.S. Ch.=20 3 Subch. B (relating to investigations and hearings).

58c2311s

=C2=A7=20 2311. (Reserved).

58c2312s

=C2=A7=20 2312. Recordkeeping.

A=20 producer liable for the fee under this chapter shall keep records, make = reports=20 and comply with regulations of the commission. The commission may = require a=20 producer to make reports, render statements or keep records as the = commission=20 deems sufficient to determine liability for the fee.

58c2313s

=C2=A7=20 2313. Examinations.

(a)=20 Access.--The commission or its authorized agents or = representatives=20 shall:

(1)=20 Have access to the relevant books, papers and records of any = producer in=20 order to verify the accuracy and completeness of a report filed or fee = paid=20 under this chapter.

(2)=20 Require the preservation of all relevant books, papers and records = for an=20 appropriate period not to exceed three years from the end of the = calendar year=20 to which the records relate.

(3)=20 Examine any employee of a producer under oath concerning the = severing of=20 natural gas subject to a fee or any matter relating to the enforcement = of this=20 chapter.

(4)=20 Compel the production of relevant books, papers and records and = the=20 attendance of all individuals who the commission believes to have = knowledge of=20 relevant matters in accordance with 66 Pa.C.S. (relating to public=20 utilities).

(b)=20 Unauthorized disclosure.--Any information obtained by the = commission=20 as a result of any report, examination, investigation or hearing under = this=20 chapter shall be confidential and shall not be disclosed, except for = official=20 purposes, in accordance with judicial order or as otherwise provided by = law. A=20 commissioner or an employee of the commission who without authorization = divulges=20 confidential information shall be subject to disciplinary action by the=20 commission.

58c2314s

=C2=A7=20 2314. Distribution of fee.

(a)=20 Establishment.--There is established a fund in the State = Treasury to=20 be known as the Unconventional Gas Well Fund to be administered by the=20 commission.

(b)=20 Deposit.--All fees imposed and collected under this chapter = shall be=20 deposited into the fund and are hereby appropriated for the purpose set = forth in=20 this section.

(c)=20 Conservation districts.--

(1)=20 From fees collected for 2011, $2,500,000 from the fund shall be=20 distributed to county conservation districts.

(2)=20 From fees collected for 2012, $5,000,000 from the fund shall be=20 distributed to county conservation districts.

(3)=20 From fees collected for 2013, and each year thereafter, $7,500,000 = from=20 the fund shall be distributed to county conservation districts.

(4)=20 Beginning July 1, 2014, each July 1 thereafter, the amount = distributed=20 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=20 for which figures have been officially reported by the Bureau of Labor=20 Statistics immediately prior to July 1.

(5)=20 Funds under paragraphs (1), (2) and (3) shall be distributed in = accordance=20 with the following:

(i)=20 One-half shall be distributed by dividing the amount equally among = conservation districts for any use consistent with the act of May 15, = 1945=20 (P.L.547, No.217), known as the Conservation District Law.

(ii)=20 One-half shall be distributed by the State Conservation Commission = in a=20 manner consistent with the Conservation District Law and the provisions = of the=20 State Conservation Commission's Conservation District Fund Allocation=20 Program-Statement of Policy under 25 Pa. Code Ch. 83 Subch. B (relating = to=20 Conservation District Fund Allocation Program-Statement of Policy).

(c.1)=20 Additional distributions.--From fees collected under this = chapter and=20 deposited in the fund for 2011 and each year thereafter:

(1)=20 One million dollars shall be distributed to the Pennsylvania Fish = and Boat=20 Commission for costs relating to the review of applications for permits = to drill=20 unconventional gas wells.

(2)=20 One million dollars shall be distributed to the commission for = costs to=20 administer this chapter and Chapter 33 (relating to local ordinances = relating to=20 oil and gas operations).

(3)=20 Six million dollars to the department for the administration of = this act=20 and the enforcement of acts relating to clean air and clean water.

(4)=20 Seven hundred fifty thousand dollars to the Pennsylvania Emergency = Management Agency for emergency response planning, training and = coordination=20 related to natural gas production from unconventional gas wells.

(5)=20 Seven hundred fifty thousand dollars to the Office of State Fire=20 Commissioner for the development, delivery and sustainment of training = and grant=20 programs for first responders and the acquisition of specialized = equipment for=20 response to emergencies relating to natural gas production from = unconventional=20 gas wells.

(6)=20 One million dollars to the Department of Transportation for rail = freight=20 assistance.

(c.2)=20 Natural gas energy development.--Following distributions from = the fund=20 under subsections (c) and (c.1), the following amounts shall be = deposited into=20 the Marcellus Legacy Fund for distribution to the department for the = Natural Gas=20 Energy Development Program under Chapter 27 (relating to Natural Gas = Energy=20 Development Program):

(1)=20 For 2011, $10,000,000.

(2)=20 For 2012, $7,500,000.

(3)=20 For 2013, $2,500,000.

(c.3)=20 Report.--All agencies or organizations receiving funds under=20 subsections (c), (c.1) and (c.2) shall submit a report by December 31, = 2012, and=20 December 31 of each year thereafter to the Secretary of the Budget and = the=20 Appropriations Committee of the Senate and the Appropriations Committee = of the=20 House of Representatives. The report shall include an itemization and=20 explanation of the use of all funds received under subsections (c), = (c.1) and=20 (c.2).

(d)=20 Distribution.--Except as provided in section 2302(a.3) and = (a.4)=20 (relating to unconventional gas well fee), following fee distribution = under=20 subsections (c), (c.1) and (c.2), from fees collected for 2011 and each = year=20 thereafter, 60% of the revenue remaining in the fund from fees collected = for the=20 prior year are hereby appropriated to counties and municipalities for = purposes=20 authorized under subsection (g). Counties and municipalities are = encouraged,=20 where appropriate, to jointly fund projects that cross jurisdictional = lines. The=20 commission, after making a disbursement under subsection (f), shall = distribute=20 the remaining funds appropriated as follows within three months after = the date=20 the fee is due:

(1)=20 Except as provided in section 2302(a.3), 36% shall be distributed = to=20 counties in which spud unconventional gas wells are located. The amount = for each=20 county to which funds will be distributed shall be determined using a = formula=20 that divides the number of spud unconventional gas wells in the county = by the=20 number of spud unconventional gas wells in this Commonwealth and = multiplies the=20 resulting percentage by the amount available for distribution under this = paragraph.

(2)=20 Except as provided in section 2302(a.4), 37% shall be distributed = to=20 municipalities in which spud unconventional gas wells are located. The = amount=20 for each municipality to which funds will be distributed shall be = determined=20 using a formula that divides the number of spud unconventional gas wells = in the=20 municipality by the number of spud unconventional gas wells in this = Commonwealth=20 and multiplies the resulting percentage by the amount available for = distribution=20 under this paragraph.

(3)=20 Except as provided in section 2302(a.4), 27% shall be distributed = to=20 municipalities located in a county in which spud unconventional gas = wells are=20 located. The amount available for distribution in each county shall be=20 determined by dividing the number of spud unconventional gas wells in = the county=20 by the number of spud unconventional gas wells in this Commonwealth and=20 multiplying the resulting percentage by the amount available for = distribution=20 under this paragraph. The resulting amount available for distribution in = each=20 county in which spud unconventional gas wells are located shall be = distributed=20 to each municipality in the county to which funds will be distributed as = follows:

(i)=20 Except as provided in section 2302(a.4), 50% of the amount = available under=20 this paragraph shall be distributed to municipalities in which spud=20 unconventional gas wells are located and to municipalities that are = either=20 contiguous with a municipality in which spud unconventional gas wells = are=20 located or are located within five linear miles of a spud unconventional = gas=20 well. The distribution shall be made as follows:

(A)=20 One-half shall be distributed to each municipality using a formula = that=20 divides the population of the eligible municipality within the county by = the=20 total population of all eligible municipalities within the county and = multiplies=20 the resulting percentage by the amount allocated to the county under = this=20 subparagraph.

(B)=20 One-half shall be distributed to each municipality using a formula = that=20 divides the highway mileage of the eligible municipality within the = county by=20 the total highway mileage of all eligible municipalities within the = county and=20 multiplies the resulting percentage by the amount allocated to the = county under=20 this subparagraph.

(ii)=20 Except as provided in section 2302(a.4), 50% of the amount = available under=20 this paragraph shall be distributed to each municipality in the county=20 regardless of whether an unconventional gas well is located in the = municipality=20 as follows:

(A)=20 One-half shall be distributed to each municipality using a formula = that=20 divides the population of the municipality within the county by the = total=20 population of the county and multiplies the resulting percentage by the = amount=20 allocated to the county under this subparagraph.

(B)=20 One-half shall be distributed to each municipality using a formula = that=20 divides the highway mileage of the municipality within the county by the = total=20 highway mileage of the county and multiplies the resulting percentage by = the=20 amount allocated to the county under this subparagraph.

(e)=20 Restriction.--The amount allocated to each municipality under=20 subsection (d) shall not exceed the greater of $500,000 or 50% of the = total=20 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=20 Consumer Price Index for all Urban Consumers for the Pennsylvania, New = Jersey,=20 Delaware and Maryland area in the preceding 12 months. Any remaining = money shall=20 be retained by the commission and deposited in the Housing Affordability = and=20 Rehabilitation Enhancement Fund for the uses specified under subsection = (f).

(f)=20 Housing Affordability and Rehabilitation Enhancement Fund.-- =

(1)=20 From fees collected for 2011, $2,500,000 from the fund shall be=20 distributed to the Housing Affordability and Rehabilitation Enhancement = Fund=20 under the act of November 23, 2010 (P.L.1035, No.105), entitled "An act = amending=20 the act of December 3, 1959 (P.L.1688, No.621), entitled, as amended, = 'An act to=20 promote the health, safety and welfare of the people of the Commonwealth = by=20 broadening the market for housing for persons and families of low and = moderate=20 income and alleviating shortages thereof, and by assisting in the = provision of=20 housing for elderly persons through the creation of the Pennsylvania = Housing=20 Finance Agency as a public corporation and government instrumentality; = providing=20 for the organization, membership and administration of the agency, = prescribing=20 its general powers and duties and the manner in which its funds are kept = and=20 audited, empowering the agency to make housing loans to qualified = mortgagors=20 upon the security of insured and uninsured mortgages, defining qualified = mortgagors and providing for priorities among tenants in certain = instances,=20 prescribing interest rates and other terms of housing loans, permitting = the=20 agency to acquire real or personal property, permitting the agency to = make=20 agreements with financial institutions and Federal agencies, providing = for the=20 purchase by persons of low and moderate income of housing units, and = approving=20 the sale of housing units, permitting the agency to sell housing loans,=20 providing for the promulgation of regulations and forms by the agency,=20 prescribing penalties for furnishing false information, empowering the = agency to=20 borrow money upon its own credit by the issuance and sale of bonds and = notes and=20 by giving security therefor, permitting the refunding, redemption and = purchase=20 of such obligations by the agency, prescribing remedies of holders of = such bonds=20 and notes, exempting bonds and notes of the agency, the income = therefrom, and=20 the income and revenues of the agency from taxation, except transfer, = death and=20 gift taxes; making such bonds and notes legal investments for certain = purposes;=20 and indicating how the act shall become effective,' providing for the=20 Pennsylvania Housing Affordability and Rehabilitation Enhancement = Program; and=20 establishing the Housing Affordability and Rehabilitation Enhancement = Fund."=20 From fees collected for 2012, and each year thereafter, $5,000,000 shall = be=20 annually distributed to the Housing Affordability and Rehabilitation = Enhancement=20 Fund.

(2)=20 Funds under paragraph (1) shall be used for the following = purposes:

(i)=20 To provide support to projects in a county in which producing=20 unconventional gas wells are located that increase availability of = quality,=20 safe, affordable housing for low-income and moderate-income individuals = or=20 families, persons with disabilities or elderly persons.

(ii)=20 To provide rental assistance in a county in which producing = unconventional=20 gas wells are located to persons or families whose household income does = not=20 exceed the area median income.

(3)=20 No less than 50% of the funds available under this subsection = shall be=20 used in fifth, sixth, seventh and eighth class counties.

(g)=20 Use of funds.--A county or municipality receiving funds under=20 subsection (d) shall use the funds received only for the following = purposes=20 associated with natural gas production from unconventional gas wells = within the=20 county or municipality:

(1)=20 Construction, reconstruction, maintenance and repair of roadways, = bridges=20 and public infrastructure.

(2)=20 Water, storm water and sewer systems, including construction,=20 reconstruction, maintenance and repair.

(3)=20 Emergency preparedness and public safety, including law = enforcement and=20 fire services, hazardous material response, 911, equipment acquisition = and other=20 services.

(4)=20 Environmental programs, including trails, parks and recreation, = open=20 space, flood plain management, conservation districts and agricultural=20 preservation.

(5)=20 Preservation and reclamation of surface and subsurface waters and = water=20 supplies.

(6)=20 Tax reductions, including homestead exclusions.

(7)=20 Projects to increase the availability of safe and affordable = housing to=20 residents.

(8)=20 Records management, geographic information systems and information = technology.

(9)=20 The delivery of social services.

(10)=20 Judicial services.

(11)=20 For deposit into the county or municipality's capital reserve fund = if the=20 funds are used solely for a purpose set forth in this subsection.

(12)=20 Career and technical centers for training of workers in the oil = and gas=20 industry.

(13)=20 Local or regional planning initiatives under the act of July 31, = 1968=20 (P.L.805, No.247), known as the Pennsylvania Municipalities Planning = Code.

(h)=20 Reporting.--

(1)=20 The commission shall submit an annual report on all funds in the = fund. The=20 report shall include a detailed listing of all deposits and expenditures = of the=20 fund and be submitted to the chairman and the minority chairman of the=20 Appropriations Committee of the Senate, the chairman and the minority = chairman=20 of the Environmental Resources and Energy Committee of the Senate, the = chairman=20 and the minority chairman of the Appropriations Committee of the House = of=20 Representatives and the chairman and the minority chairman of the = Environmental=20 Resources and Energy Committee of the House of Representatives. The = report shall=20 be submitted by December 30, 2012, and by September 30 of each year=20 thereafter.

(2)=20 All counties and municipalities receiving funds from the fund = under this=20 section shall submit information to the commission on a form prepared by = the=20 commission that sets forth the amount and use of the funds received in = the prior=20 calendar year. The form shall set forth that the funds received were = committed=20 to a specific project or use as authorized in this section. The reports = shall be=20 published annually on the county or municipality's publicly accessible = Internet=20 website.

(i)=20 Availability of funds.--Distribution of funds under this = section and=20 section 2315 (relating to Statewide initiatives) are contingent on = availability=20 of funds in the fund. If sufficient funds are not available, the = commission=20 shall disburse funds on a pro rata basis.

58c2314v

Cross=20 References. Section 2314 is referred to in sections 2302, = 2303, 2315,=20 2702 of this title.

58c2315s

=C2=A7=20 2315. Statewide initiatives.

(a)=20 Establishment.--There is established in the State Treasury a = fund to=20 be known as the Marcellus Legacy Fund.

(a.1)=20 Deposit and distribution.--Following distribution under = section=20 2314(c), (c.1) and (c.2) (relating to distribution of fee) from fees = collected=20 for 2011 and each year thereafter, 40% of the remaining revenue in the = fund=20 shall be deposited into the Marcellus Legacy Fund and appropriated to = the=20 commission and distributed within three months after the date the fee is = due as=20 follows:

(1)=20 Twenty percent to the Commonwealth Financing Authority for grants = to=20 eligible applicants for the following:

(i)=20 Acid mines: damage, abatement and cleanup and mine reclamation, = with=20 priority given to projects which recycle and treat water for use in = drilling=20 operations.

(ii)=20 Orphan or abandoned oil and gas well plugging.

(iii)=20 Complying with the act of January 24, 1966 (1965 P.L.1535, = No.537), known=20 as the Pennsylvania Sewage Facilities Act.

(iv)=20 Planning acquisition, development, rehabilitation and repair of = greenways,=20 recreational trails, open space, parks and beautification projects.

(v)=20 Programs to establish baseline water quality data on private water = supplies.

(vi)=20 Watershed programs and related projects.

(vii)=20 Up to 25% of funds distributed to the Commonwealth Financing = Authority=20 under this paragraph may be utilized for flood control projects.

(2)=20 Ten percent to the Environmental Stewardship Fund.

(3)=20 Twenty-five percent to the Highway Bridge Improvement Restricted = Account=20 in the Motor License Fund to counties to be distributed to fund the cost = of the=20 replacement or repair of locally owned at-risk deteriorated bridges. = Funds shall=20 be distributed to counties proportionately based on the population of = the county=20 as follows:

(i)=20 In each county, the distribution shall be according to the = following=20 formula:

(A)=20 Divide:

(I)=20 the total population of the county; by

(II)=20 the total population of the Commonwealth;

(B)=20 Express the quotient under clause (A) as a percentage.

(C)=20 Multiply:

(I)=20 the percentage under clause (B); by

(II)=20 the amount of money to be distributed under this paragraph.

(ii)=20 Each county shall receive a minimum of $40,000 to the extent funds = are=20 available.

(iii)=20 The Department of Transportation shall release money under this = paragraph=20 upon approval of a plan submitted by a county or municipality to repair = an=20 at-risk deteriorated bridge. The plan must include funding for = replacement or=20 repair.

(iv)=20 A county of the first or second class may submit a plan to use its = funds=20 under this paragraph for at-risk deteriorated bridges owned by a public=20 transportation authority.

(4)=20 Twenty-five percent for water and sewer projects. Fifty percent of = the=20 amount distributed under this paragraph shall be transmitted to the = Pennsylvania=20 Infrastructure Investment Authority to be used in accordance with the = act of=20 March 1, 1988 (P.L.82, No.16), known as the Pennsylvania Infrastructure=20 Investment Authority Act. Fifty percent of the amount distributed under = this=20 paragraph shall be distributed to the H2O PA program to be used by the=20 Commonwealth Financing Authority in accordance with section 301 of the = act of=20 July 9, 2008 (P.L.908, No.63), known as the H2O PA Act. The prohibition = on=20 grants for projects located in a city or county of the first or second = class=20 under section 301 of the H2O PA Act shall not apply to funds distributed = to the=20 H2O PA Program under this paragraph.

(5)=20 Fifteen percent for the planning, acquisition, development, = rehabilitation=20 and repair of greenways, recreational trails, open space, natural areas, = community conservation and beautification projects, community and = heritage parks=20 and water resource management. Funds may be used to acquire lands for=20 recreational or conservation purposes and land damaged or prone to = drainage by=20 storms or flooding. Funds shall be distributed to counties = proportionately based=20 on the population of the county as follows: