Millions of dollars from the state's natural gas impact fee legislation soon will be coming into Lycoming County and other counties and municipalities in the Marcellus Shale natural gas region.
In all, about $9.8 million is expected for Lycoming County and its 52 municipalities.
The impact fee, known as Act 13, became effective April 14 and allows the state to collect fees for wells drilled by natural gas companies.
Local municipalities will receive the bulk of the funding - about $5.8 million - while the county government will receive about $3.9 million, according to the state Public Utility Commission.
"There has never been another piece of legislation that brought that amount of money to a rural district in Pennsylvania," said State Sen. E. Eugene Yaw, R-Loyalsock Township, who represents Lycoming, Bradford, Sullivan, Susquehanna and Union counties.
Those counties share in the $42.3 million that was raised from the impact fee. Gas companies are required to pay $50,000 for horizontal wells and $10,000 for vertical wells, according to the legislation.
Of the $204 million raised from Marcellus Shale drilling activity, $23 million is shared between agencies such as the state Department of Environmental Protection, Fish and Boat Commission and Department of Transportation.
A so-called "legacy fund" also is established with some of the funding to support highway bridge improvements, environmental stewardship and the Commonwealth Financing Authority, an independent agency that administers the state's economic stimulus packages.
Funding to local municipalities is based on a formula that calculates road miles, population and physical distance to well sites, said William Kelly, deputy director of the county Department of Planning and Community Development.
All municipalities - with or without gas wells - within the Marcellus Shale drilling area receive at least some of the money generated from Act 13.
"Of the money that comes to the locals, 64 percent goes to the municipalities; 36 percent goes to the county," he said.
Municipalities max out at a $500,000 level, but excess dollars can be held for eligible county Pennsylvania Housing Finance Agency projects, Kelly said.
Lycoming County Commissioner Jeff C. Wheeland said the amount due to the county is slightly more than anticipated.
"We are in the process of formulating a plan and an application program that we can work with (all) municipalities and rank and rate projects," he said.
By law, funding can only be used for certain projects including highway and bridge infrastructure, water and sewer systems, public safety, environmental programs, tax reductions, social services and affordable housing.
Wheeland said county funding can be used in conjunction with local money to maximize projects. He said some priority projects under consideration include a traffic study for the Muncy-Hughesville corridor, records management in the county Register and Recorder's Office and "critical" housing initiatives.
"The real key to this is municipalities working with the county, and the county working with municipalities," said Wheeland.
Yaw agreed that cooperation among local governments in determining a spending plan is important.
"That will be the hardest," he said. "You give a group 13 choices (of projects), there are going to be some disagreements."
Impact fees will be generated annually, and could increase over this year's revenues depending on the economy, Yaw added.
Yaw said the impact fee differs from a gas production tax, which would only generate revenue for the state's general fund. Money from impact fees go directly to local governments instead of being doled out by Harrisburg.
"That is what's so unique about this. It's not subject to be divvied up. The money comes back locally," he said. "There are people out there that say we should tax (drillers) more. I'm not so sure about that. There are no do-overs in this thing. If there ever is a severance tax put in place the impact fees go away."
Cogan House, Cummings and Penn townships received the maximum $500,000 funding. Other municipalities that will receive at least $300,000 include McHenry and Loyalsock townships.
