In addition to direct participation in the community, JKLM contributes to the community via Impact Fees and Royalty Payments.
Pennsylvania Act 13 requires JKLM to pay an annual fee for each horizontal well it has started to drill, called an Impact Fee. Pennsylvania is the only state that levies an Impact Fee on unconventional natural gas operators. This fee is a significant extraction tax which provides substantial funding for Potter County and local municipalities. It is also in addition to road repair and road bonding, in which JKLM must acquire a PennDot issued permit and finance any road cost recovery items such as damage repair and inspections.
Figures Sources: Sweden Township, Summit Township, Ulysses Township, Eulalia Township
Impact fees can be used in communities to reduce taxes, finance public infrastructure construction, parks, fire and EMS, social services, environmental programs, etc. Other portions of the funds are distributed to various state agencies. According to the PUC, JKLM Energy, LLC paid $1,651,900 in Impact Fees, nearly double its 2016 payment of $830,400. JKLM Energy’s total Impact Fee tax payments total more than $2.5 million since drilling began in 2015. In 2016, townships received an additional $4,012 for every horizontal well located within their boundaries or their proximity to jurisdictions where natural gas extraction took place.
In order to continue seeing more benefits from Impact Fees, contact your township officials to tell them you support natural gas development.
While Pennsylvania does not have a "severance tax," analysis by the State Independent Fiscal Office suggests the Pennsylvania Impact Fee equates to being one of the highest extraction taxes in the United States.
An additional severance tax could limit future drilling in the state, which would generate less tax money for Pennsylvania, not more. Estimated revenues to private landowners in Pennsylvania were $13.1 Billion from 2012-2014, and an estimated $58.1 Billion from 2015-2030 is projected. A strong Pennsylvania energy policy will not only lead to more jobs, but secondary economic activity which leads to more investment. With more jobs and people working, the tax base will grow and enable more budgetary flexibility for government.
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