ACT 13 UPDATE – Facing an April 16 deadline for action, all 37 eligible counties have levied the shale gas impact fee authorized under Act 13, comprehensive amendments to the Oil and Gas act to deal with shale gas development. Another 14 counties with shale formations but no active drilling have enacted the fee, based on ongoing leasing and potential permitting activity.
The per-well fee is on a 15 year declining scale for each unconventional gas well for which drilling has commenced, adjusted annually based on the price of gas and for inflation. The fee is administered by the Public Utility Commission (PUC), and funds a number of state programs relating to natural gas extraction as well as making direct payments to impacted counties and their municipalities. For 2012, producer payments are due by September 1, with payout to the funds and municipalities occurring on or before December 1.
On April 11, the Commonwealth Court issued a 120 day preliminary injunction of the zoning provisions of the act, in litigation brought by a group of municipalities attempting to have the zoning restrictions declared unconstitutional. The injunction is limited to municipalities that already have zoning provisions in place, to give them additional time to come into compliance, and specifically to do so without affecting the validity of any current ordinance. The injunction also serves to give the court additional time to consider the merits of the litigation (the injunction does not deal with the litigation’s issue of constitutionality), and to consider a petition by the Marcellus Coalition and other representatives of the shale gas industry to intervene. The injunction applies just to the zoning compliance deadline, and not to any other element of the Act. Specifically, the deadline for counties with spud wells to enact an ordinance levying the impact fee was not affected.
The PUC has also issued a Tentative Implementation Order, detailing PUC, county, municipal, and producer responsibilities under the act. Comments on the tentative order were due in early April, with a final order expected soon. The Tentative Order, along with county ordinances and other documentation, is available on the PUC website, www.puc.state.pa.us. Additional information is available on the CCAP website as well.
ASSESSMENT REPORTS RELEASED – House Task Forces formed under HR 343 and HR 344 to study property assessment practice and the operations of the State Tax Equalization Board (STEB), respectively, have released their reports and recommendations. The Task Forces included members of the House Local Government and Finance committees, as well as representation from CCAP, its affiliate the Assessors Association of Pennsylvania (AAP), and several state agencies and interest groups.
The HR 343 report recommends further work on development of a set of uniform standards for county reassessment contracting, standards for disclosing the county's system of property valuation and assessment, a self-evaluation tool for counties to determine when a reassessment is warranted, and a standard to be used for a statewide mandatory reassessment time frame. While the Task Force discussed in detail the recommendations contained in the Legislative Budget and Finance Committee’s (LBFC) 2010 report on assessment issues, along with recommendations by CCAP, AAP and others, it concluded that its six month time frame did not allow sufficient time to make final recommendations, and recommended these be continuing tasks for the House Local Government and Finance committees.
The HR 344 task force focused on STEB, which has responsibility for statistical measures of property sales that underpin local assessment appeals, state realty transfer taxes, and school funding formulas. The task force concurred with the critical findings of the LBFC report and a comparable report by the Auditor General, and made specific recommendations for improvements to STEB staffing and practice. It also recommended uniform electronic filing of sales data, housing data with the Department of Revenue, and development of uniform property record cards. It acknowledged and supported work of CCAP and AAP, already underway, which would fulfill some of these objectives.
In his 2012-2013 budget submission, Governor Corbett has proposed transferring STEB responsibilities to the Department of Community and Economic Development.
MATP CO-PAY PROPOSAL WITHDRAWN – The Department of Public Welfare (DPW) recently informed counties that they will not be implementing the previously proposed $2.00 copayment for Medical Assistance Transportation Program (MATP) paratransit rides.
Several months ago, the department issued a draft notice and ops memorandum implementing a $2.00 copayment for paratransit trips. Since that time, both CCAP and its affiliate, the Pennsylvania Association of County Human Services Administrators (PACHSA) had been communicating with DPW on the drawbacks of a copayment and had submitted comments through several forums. Some of the concerns with a copayment included the cost of administration, the ability to collect and enforce, privacy concerns, and the cost of covering unpaid copayments.
CCAP has expressed its gratitude for the department’s decision and appreciates their continued efforts towards resolving issues within this program. Both CCAP and PACHSA will continue to work with the department to develop new cost-containment initiatives, and welcome member input toward that end.
STORM WATER BILL ADVANCES – The Senate has unanimously approved legislation to create an additional tool for storm water management in Pennsylvania. Senator Ted Erickson (R-Delaware) introduced SB 1261 to amend the Municipal Authorities Act to include storm water management and planning in the powers and projects that may be undertaken by municipal authorities. Current law does not authorize this power for authorities, but it is often intertwined with other authority functions, such as sewage treatment. It would also offer the ability of an authority to recover costs associated with storm water projects through rates imposed by the authority for its services.
CCAP’s legislative platform supports statutory authority for a county or multiple counties to form an authority that has the ability to raise revenues and undertake activities related to storm water management, as well as water quality and subsurface water issues.
The bill has now been referred to the House Local Government Committee.
CLEAN AND GREEN AMENDMENTS PASS SENATE – In late March, the Senate unanimously voted to approve Senate Bill 1298, which makes changes to the Clean and Green Act to specifically allow composting as an eligible activity on land enrolled in the program. The bill defines compost as material resulting from the biological digestion of dead animals, animal waste or other biodegradable materials. Although a portion of the composted material could come from off-property, such as restaurant waste, at least half of the material composted must be from products commonly produced on farms.
The bill would be retroactive to a facility that is actively appealing a Clean and Green ruling relating to composting at the time of enactment, which is currently occurring in Lancaster County. The bill has since been referred to the House Agriculture and Rural Affairs Committee.
LEGISLATURE POISED TO ALLOW CREATION OF LAND BANKS – Bills to assist in the conversion of vacant, abandoned and tax-delinquent properties into productive use are making their way through the Senate. House Bill 1682, introduced by Rep. John Taylor (R-Philadelphia) and SB 1414, introduced by Sen. David Argall (R-Schuylkill) would allow counties, cities, boroughs, townships or incorporated towns with a population of more than 10,000 to create land banks by ordinance. Land banks would be governed by a board and would be able to acquire, manage and improve tax-foreclosed, abandoned properties.
While real property is held by a land bank, its income and operations would be exempt from state and local taxes, unless the property is continuously leased to a private third party for five consecutive years. In addition, a land bank may by resolution discharge a lien or claim to its real property for taxes owed, but must distribute any revenues received attributable to these liens or claims. The land bank may establish a hierarchal ranking of priorities for use of real property it conveys, including purely public spaces, affordable housing, retail and industrial activities and conservation areas. It may also file an action to quiet title to property in which it has an interest.
Both bills were reported from the Senate Urban Affairs and Housing Committee the first week of April (HB 1682 was approved by the House in February), and move to the full Senate for further review.
TAX ABATEMENT FOR FLOOD DAMAGE – As Pennsylvania continues to recover from flood damage caused last year by Hurricane Irene and Tropical Storm Lee, the House recently approved several bills to provide assistance.
House Bill 1913, introduced by Rep. Lynda Schlegel Culver (R-Northumberland), would allow counties, municipalities and school districts to abate a portion of 2011 real estate taxes on property damaged by the storms, either by refund or credit. The abatement would be determined based either on reassessment or on federal damage estimates. The bill also gives local governments the option to temporarily exempt reconstruction or repairs to property damaged by these storms, limited to the difference between the assessed valuation prior to the damages and the increase in value due to the actual cost of reconstruction or repairs. The bill was unanimously approved by the House in late March.
Similar legislation offered by Senator John Blake (D-Lackawanna), SB 1267, was approved by the Senate last November. Both bills await consideration by the opposite chamber.