HB 1686 — An Act amending the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal Code, in oil and gas wells, further providing for definitions and for Oil and Gas Lease Fund and providing for Public Natural Resources Trust Fund.

PRINTER'S NO.     2071

                  THE GENERAL ASSEMBLY OF PENNSYLVANIA



                      HOUSE BILL
                      No. 1686
                                             Session of
                                               2025

     INTRODUCED BY O'MARA, GIRAL, HILL-EVANS, CIRESI, SCHLOSSBERG,
        KHAN, ISAACSON, OTTEN AND GREEN, JULY 1, 2025

     REFERRED TO COMMITTEE ON ENVIRONMENTAL AND NATURAL RESOURCE
        PROTECTION, JULY 1, 2025


                                  AN ACT
 1   Amending the act of April 9, 1929 (P.L.343, No.176), entitled
 2      "An act relating to the finances of the State government;
 3      providing for cancer control, prevention and research, for
 4      ambulatory surgical center data collection, for the Joint
 5      Underwriting Association, for entertainment business
 6      financial management firms, for private dam financial
 7      assurance and for reinstatement of item vetoes; providing for
 8      the settlement, assessment, collection, and lien of taxes,
 9      bonus, and all other accounts due the Commonwealth, the
10      collection and recovery of fees and other money or property
11      due or belonging to the Commonwealth, or any agency thereof,
12      including escheated property and the proceeds of its sale,
13      the custody and disbursement or other disposition of funds
14      and securities belonging to or in the possession of the
15      Commonwealth, and the settlement of claims against the
16      Commonwealth, the resettlement of accounts and appeals to the
17      courts, refunds of moneys erroneously paid to the
18      Commonwealth, auditing the accounts of the Commonwealth and
19      all agencies thereof, of all public officers collecting
20      moneys payable to the Commonwealth, or any agency thereof,
21      and all receipts of appropriations from the Commonwealth,
22      authorizing the Commonwealth to issue tax anticipation notes
23      to defray current expenses, implementing the provisions of
24      section 7(a) of Article VIII of the Constitution of
25      Pennsylvania authorizing and restricting the incurring of
26      certain debt and imposing penalties; affecting every
27      department, board, commission, and officer of the State
28      government, every political subdivision of the State, and
29      certain officers of such subdivisions, every person,
30      association, and corporation required to pay, assess, or
31      collect taxes, or to make returns or reports under the laws
32      imposing taxes for State purposes, or to pay license fees or
33      other moneys to the Commonwealth, or any agency thereof,
 1      every State depository and every debtor or creditor of the
 2      Commonwealth," in oil and gas wells, further providing for
 3      definitions and for Oil and Gas Lease Fund and providing for
 4      Public Natural Resources Trust Fund.
 5      The General Assembly of the Commonwealth of Pennsylvania
 6   hereby enacts as follows:
 7      Section 1.     Section 1601-E of the act of April 9, 1929
 8   (P.L.343, No.176), known as The Fiscal Code, is amended by
 9   adding a definition to read:
10   Section 1601-E.        Definitions.
11      The following words and phrases when used in this article
12   shall have the meanings given to them in this subarticle unless
13   the context clearly indicates otherwise:
14      * * *
15      "Trust fund."        The Public Natural Resources Trust Fund
16   established in section 1601.3-E.
17      Section 2.     Section 1601.2-E(e) of the act, amended July 11,
18   2024 (P.L.550, No.54), is amended to read:
19   Section 1601.2-E.       Oil and Gas Lease Fund.
20      * * *
21      (e)   Annual transfers.--The following apply:
22            (1)   (i)     [Except as provided under subparagraph (ii),
23            for] For the [2017-2018] 2025-2026 fiscal year and each
24            fiscal year thereafter, [$20,000,000] $35,000,000 shall
25            be transferred from the fund to the Marcellus Legacy Fund
26            for distribution to the Environmental Stewardship Fund.
27                  [(ii)    No amount shall be transferred from the fund
28            to the Marcellus Legacy Fund for distribution to the
29            Environmental Stewardship Fund for the 2019-2020, 2020-
30            2021, 2021-2022, 2022-2023, 2023-2024 and 2024-2025
31            fiscal year.]
32            (2)   For the 2017-2018 fiscal year and each fiscal year

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 1      thereafter, $15,000,000 shall be transferred from the fund to
 2      the Marcellus Legacy Fund for distribution to the Hazardous
 3      Sites Cleanup Fund.
 4            (3)   For the 2025-2026 fiscal year and each fiscal year
 5      thereafter, money shall be transferred from the fund as
 6      provided in section 1601.3-E.
 7            (4)   In the fiscal year following the fiscal year in
 8      which the principal of the trust fund exceeds the amount
 9      specified under section 1601.3-E(d)(2) and each fiscal year
10      thereafter, all money in the fund shall be appropriated to
11      the department as authorized under this section.
12      Section 3.    The act is amended by adding a section to read:
13   Section 1601.3-E.    Public Natural Resources Trust Fund.
14      (a)   Establishment.--The Public Natural Resources Trust Fund
15   is established in the State Treasury.
16      (b)   Revenue sources.--In addition to the transfers
17   authorized in paragraph (1), the trust fund shall include money
18   appropriated by the General Assembly, money received from the
19   Federal Government and grants or donations from other sources.
20   Interest and any other earnings shall remain in the trust fund.
21   Gifts and donations of marketable securities may be held or
22   disposed of for cash at the option of the State Treasurer. The
23   cash receipts of gifts and donations of cash or capital assets
24   and marketable securities disposed of for cash must be credited
25   immediately to the principal of the trust fund. When marketable
26   securities are disposed of for cash, the amount to be credited
27   to the trust fund shall be the value of the marketable
28   securities at the time of the gift or donation. The following
29   apply to money deposited in the trust fund:
30            (1)   Beginning with the 2025-2026 fiscal year and each

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 1      fiscal year thereafter, all rents and royalties paid into the
 2      fund in excess of $70,000,000 shall be transferred to the
 3      trust fund.
 4            (2)   Disbursements from the trust fund shall be made only
 5      when the balance of the trust fund exceeds $700,000,000.
 6      (c)   Balance.--Money in the trust fund not expended or
 7   distributed in the fiscal year in which it was made available
 8   shall not lapse and shall be available for use under this
 9   section in the next fiscal year.
10      (d)   Disposition.--
11            (1)   For fiscal year 2025-2026 through the fiscal year
12      following the fiscal year in which the principal of the trust
13      fund exceeds $700,000,000, of the remaining rents and
14      royalties paid into the fund after any transfer under
15      subsection (b)(1):
16                  (i)    The department shall allocate 57% as follows:
17                         (A)   40% for the department's community
18                  recreation and conservation program for grant funding
19                  of projects that meet the purposes specified under
20                  subsection (e).
21                         (B)   60% for use by the department for projects
22                  on State park and State forest land that meet the
23                  purposes specified in subsection (e).
24                  (ii)    43% shall be transferred to the Environmental
25            Stewardship Fund, of which:
26                         (A)   65% percent shall be for use by the
27                  Department of Environmental Protection for projects
28                  that meet the purposes set forth in subsection (e).
29                         (B)   35% shall be for use by the Department of
30                  Agriculture for farmland preservation projects, not

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 1                  to exceed $15,000,000 in a fiscal year.
 2            (2)   For the fiscal year following the fiscal year in
 3      which the principal of the trust fund exceeds $700,000,000
 4      and each fiscal year thereafter, the department may allocate
 5      from the trust fund an amount up to the amount of interest
 6      income derived from investment of money in the trust fund
 7      during the preceding fiscal year. The allocation under this
 8      paragraph is subject to the State Treasurer certifying in the
 9      financial report required under subsection (h) that making
10      the allocation will not reduce the principal of the trust
11      fund.
12            (3)   The department shall allocate the money available
13      under paragraph (2) in the same proportion as amounts
14      allocated under paragraph (1).
15            (4)   A disposition of money under this subsection that is
16      inconsistent with the provisions of paragraph (1), (2) or (3)
17      may be made through approval of a separate appropriations
18      bill by a vote of two-thirds of the members elected to the
19      Senate and the House of Representatives.
20      (e)   Purposes.--The money in the trust fund may only be used
21   for the following purposes:
22            (1)   Public land conservation.
23            (2)   Public recreation.
24            (3)   Watershed protection.
25            (4)   Acid mining drainage abatement and maintenance and
26      operation of existing acid mining drainage projects.
27            (5)   Heritage area projects.
28            (6)   Conservation landscape initiatives of the
29      department.
30            (7)   Farmland preservation.

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 1            (8)    Greenways.
 2            (9)    Green infrastructure for flood mitigation.
 3            (10)    Reforestation and urban canopy projects.
 4            (11)    Abandoned well plugging.
 5            (12)    Habitat restoration.
 6            (13)    Monitoring and mitigation of impacts or damage to
 7      State land caused by activity related to oil and gas
 8      development.
 9            (14)    Acquisition of replacement land and buffers to
10      offset or prevent harm to State land caused by activity
11      related to oil and gas development.
12            (15)    Acquisition of oil, gas and other mineral rights
13      located under State land.
14            (16)    Educational programming by the department and grant
15      recipients of the department, with a focus on science-based
16      natural resource conservation.
17            (17)    Scientific research related to the other purposes
18      listed under this subsection.
19            (18)    The annual audit required under subsection (j).
20            (19)    The trust fund reports required under this section.
21      (f)   Limitation.--Money in the trust fund may not be used to
22   fund maintenance or operating expenses, unless the expenses are
23   directly related to acid mining drainage projects existing as of
24   the effective date of this subsection.
25      (g)   Supplemental funding.--Money in the trust fund shall
26   supplement funding from the General Fund, including the sources
27   of funding for the purposes listed in subsection (e). Money in
28   the trust fund may not be used to supplant existing General Fund
29   appropriations to the department or to any other agency of the
30   Commonwealth.

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 1      (h)   Financial report.--The State Treasurer shall complete
 2   and submit an annual financial report of the trust fund to the
 3   Governor, the Attorney General and the Auditor General. The
 4   report shall be submitted within 30 days of the end of the first
 5   full fiscal year following the effective date of this subsection
 6   and within 30 days of the end of each fiscal year thereafter.
 7   The report shall contain the following:
 8            (1)   A statement of the principal then held in the trust
 9      fund and any changes in the principal since the report of the
10      prior fiscal year.
11            (2)   A statement of the trust fund income received during
12      the fiscal year in question.
13            (3)   A statement of the investments then held in the
14      trust fund, including descriptions and respective values of
15      the investments.
16            (4)   Any other information determined by the State
17      Treasurer to reflect a full and complete disclosure of the
18      financial operations of the trust fund.
19      (i)   Expenditure report.--The department shall complete and
20   submit an annual report of the expenditures authorized in
21   subsection (d) to the Governor, the Attorney General, the
22   chairperson and minority chairperson of the Environmental
23   Resources and Energy Committee of the Senate and the chairperson
24   and minority chairperson of the Environmental and Natural
25   Resource Protection Committee of the House of Representatives.
26   The report shall be submitted within 45 days of the end of the
27   first fiscal year following the effective date of this
28   subsection and within 45 days of the end of each fiscal year
29   thereafter. The department shall post and maintain each report
30   on the department's publicly accessible Internet website. The

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 1   report shall contain the following:
 2            (1)   For fiscal year 2025-2026 through the fiscal year
 3      following the fiscal year in which the principal of the trust
 4      fund exceeds $700,000,000:
 5                  (i)    A description and accounting of all expenditures
 6            and distributions from the fund for the preceding fiscal
 7            year.
 8                  (ii)    An outline of the objectives and planned
 9            expenditures from the fund for the next fiscal year.
10            (2)   For the fiscal year following the fiscal year in
11      which the principal of the trust fund exceeds $700,000,000
12      and each fiscal year thereafter:
13                  (i)    A description and accounting for all
14            expenditures and distributions by the trust fund for the
15            preceding fiscal year.
16                  (ii)    An outline of the objectives and planned
17            expenditures from the trust fund for the next fiscal
18            year.
19      (j)   Audit.--The Auditor General shall perform an audit of
20   the trust fund each fiscal year. Costs of the audit shall be
21   paid out of the trust fund.
22      (k)   Public information.--Information in the possession of
23   the department, the Treasury Department, the Department of
24   Environmental Protection and the Department of Agriculture
25   relating to the trust fund shall be considered a public record
26   under the act of February 14, 2008 (P.L.6, No.3), known as the
27   Right-to-Know Law.
28      Section 4.        This act shall take effect immediately.




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