The pending Marcellus Shale impact fee legislation absolves Pennsylvania Gov. Tom Corbett of any responsibility for two major political landmines surrounding the legislation -- implementing a tax and limiting the rights of municipal government.
The bill, which has been passed by the Pennsylvania House and Senate, gives counties the power to decide whether or not they would like to implement the fee, which would charge drillers between $190,000 and $310,000 per well, depending on gas prices, an effective tax rate of between 2 and 3 percent. In counties where commissioners vote not to introduce a fee, municipalities can overturn that decision with a majority.
For Corbett, a signer of Grover Norquist’s no-tax pledge, the “fee” bill succeeds in allowing him to escape the wrath of the anti-taxers. It also lets him sidestep anger from Pennsylvanians who don’t like to see control taken away from their local governments. While municipalities have clamored for money to address their crumbling roads and other infrastructure issues caused by the gas industry, they have also fought tooth and nail to maintain their ability to craft local ordinances restricting drilling. In the new deal, municipalities will get some money, but will have a difficult time trying to make a case to the PUC that their ordinances
Before the bill’s passage, gas companies successfully sued townships that had passed such ordinances, arguing that such rights don’t exist under the state’s Oil and Gas Act. The new bill essentially backs that position, though it does so passively by delegating the Pennsylvania Public Utility Commission as the arbiter of what’s “fair,” – another coup for Gov. Corbett, who can argue it is the PUC, and not him, preventing local governments from making their own rules.
In Centre County, Rush Township was in the process of crafting its own ordinance to limit drilling, based upon its right to protect its water sources. That plan was put on hold while it waited to see the outcome of the pending legislation. If there were any question before about the township’s legal position, the new bill likely removes it in its Section 32, quoted below:
"Notwithstanding any other law to the contrary, environmental acts are of Statewide concern and, to the extent that they regulate oil and gas operations, occupy the entire field of regulation, to the exclusion of all local ordinances. The Commonwealth by this section, preempts and supersedes the local regulation of oil and gas operations regulated by the environmental acts...”
Rush Township solicitor Dave Mason said he would review the bill after it was signed into law and then issue an opinion to the supervisors. If their ordinance looks like it’s dead in the water, Mason and Rush Township residents who supported it may take little solace in the fact that they will now earn some cash from the gas they don’t want removed from their land.