County gas drilling impact fee gets boost in committee vote
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By Robert Swift (Harrisburg Bureau Chief)
Published: November 3, 2011
HARRISBURG – Legislation that could provide for state preemption of local gas drilling ordinances won approval from a House committee Wednesday on a party-line vote.
The measure approved 15 to 10 by the Finance Committee would amend the 1984 Oil and Gas Act to supercede local drilling ordinances in areas where the state has an “appropriate” regulation, according to a committee bill summary.
The bill contains Gov. Tom Corbett’s plan to give counties with Marcellus wells the option of adopting an impact fee on drillers with 75 percent of the fee revenue going for local uses ranging from road repair to affordable housing and court budgets.
Local governments would have difficulty keeping wells away from residential areas and schools with the bill’s preemption provision, said Rep. Phyllis Mundy, D-Kingston, the ranking Democrat on the panel.
“The bill strips from local governments what little power they have to locate wells,” she added.
The sponsor, Rep. Brian Ellis, R-Lyndora, said the bill would set state standards for the nearly 50 percent of municipalities that don’t have gas ordinances.
The bill provides that each well pay an impact fee up to $40,000 the first year of operation, $30,000 the second year, $20,000 the third year and $10,000 in the fourth through 10th years.
It would implement a number of recommendations concerning environmental protection made last summer by the governor’s Marcellus Shale Advisory Commission.
The county impact fee approach has drawn support from the House Republican leadership as an alternative to other legislation calling for state collection of impact fee revenue and distribution to eligible counties. The GOP bill differs from the governor’s proposal with a plan to dedicate a portion of royalties from gas drilling on state-owned land for statewide environmental programs, said House Majority Leader Mike Turzai, R-Pittsburgh.
“This bill contains many of the provisions contained in our proposal, and I am pleased to see the Legislature working toward a final bill,” Corbett said.
On the committee, Reps. Mario Scavello, R-Mount Pocono, and Mike Peifer, R-Honesdale, voted for the bill. Mundy and Rep. Sid Michaels Kavulich, D-Taylor, voted against the bill.
Committee members debated and voted on the bill in a small committee room jammed to overflow with dozens of observers.
Mundy said the impact fee would be the equivalent of a one percent tax – a rate very low compared to other drilling states. The bill would generate no revenue for Luzerne County despite the impact of compressor stations and pipelines planned for there, she added.
The bill wouldn’t generate enough revenue to meet local impact needs, Kavulich said.
Ellis touted it as a job-creation measure.
The Senate has postponed action on impact fee legislation being developed by both caucuses until the chamber returns Nov. 14 following an election recess.