The General Assembly and Gov. Rendell gave final approval to a Fiscal Code bill-- House Bill 1614 (Belfanti-D-Northumberland)-- which includes a planto lease State Forest land for natural gas drilling they hope will generate $60 million in FY 2009-10. The Governor signed the bill into law.

The bill provides no acreage limits or caps, no minimum bids/royalties on leasing, but lets the Department of Conservation and Natural Resources to control the leasing process.

The language in the bill also includes a provision which says, " In makinq appropriations (from the Oil and Gas Fund), the General Assembly shall consider the adoption of an allocation to municipalities impacted by a Marcellus well."

A previous House-passed version of the State Forest leasing in House Bill 1407 (DeLuca-D-Allegheny)caps the amount of acres the Department of Conservation and Natural Resources could lease at 30,000 for each of the next two years, sets a minimum bid of $3,000 per acre (rather than $2,500 in the Senate-passed version) and a minimum 18 percent (rather than 16 percent) royalty.

Moneys from the leasing would still go into the Oil and Gas Fund administered by DCNR, but $60 million would be transferred out of the Fund in FY 2009-10 to help balance the budget. No transfers were included for FY 2010-11, but the budget balance sheet includes a $180 million transfer to the General Fund for FY 2010-11.

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