Shale Daily / NGI All News Access

Pennsylvania Impact Fee Delayed Again

Pennsylvania lawmakers approached Halloween hoping to bring drilling impact fee legislation to the Senate floor before the end of October, but after failing to resolve major issues over the weekend they now hope to pass a bill before Thanksgiving.

While Senate leaders and Gov. Tom Corbett have proposed similar fees on shale drillers, they continue to dispute administrative aspects of the legislation, such as whether the state or the counties would collect the fee, and whether the revenue from the fee would go primarily to statewide programs or local governments.

The Senate Appropriations Committee dropped those issues from Senate Bill 1100 -- the legislative vehicle in the Senate -- last week to focus on passing increased environmental standards that garnered broader support (see Shale Daily, Oct. 28).

As the Senate hammers out those issues, though, House Republicans have also proposed legislation. While House members have proposed numerous tax and fee bill over the past year, House leadership has not endorsed any measure until now.

Rep. Brian Ellis of southwestern Pennsylvania announced plans last Friday to introduce a fee that would "mirror" the Corbett proposal by giving counties the authority to enact a fee on shale wells and distributing the revenue from that fee through the formula Corbett proposed. It also includes stricter environmental standards proposed by the Corbett administration (see Shale Daily, Oct. 4).

The Corbett-Ellis proposal would allow counties to enact a fee up to $40,000 per well in the first year of production that drops to $10,000 over the first four years and disappears after 10 years. It would keep 75% of the revenue at the local level.

However, the Ellis legislation would also move money from the Oil and Gas Lease Fund -- where revenue from drilling on state land is collected -- to statewide programs such as Growing Greener, the Hazardous Sites Cleanup Program, the Conservation District Program and the Forest Reserves Municipal Relief Program.

That is meant to address a desire from southeastern Pennsylvania that the fee or tax benefit statewide programs. The Philadelphia region is the most populous region of Pennsylvania and the only region that doesn't overlie the Marcellus or Utica shales.

(That legislation differ considerably from an impact fee bill that Ellis introduced in late June. His original bill would have imposed a $25,000 annual fee per well in the first two years of production that dropped to $10,000 for years three through 10.)

With enough support, the Ellis bill could create a race between the House and the Senate to create the primary vehicle for a fee by passing legislation first.

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