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Clock Running Out On Pennsylvania Impact Fee Debate

With only a few days left before the Pennsylvania General Assembly recesses for the year, some groups are calling on lawmakers to pass an impact fee on Marcellus Shale development now, while others are criticizing the bills currently on the table.

A collection of Pennsylvania business groups sent a letter to Gov. Tom Corbett and legislative leaders last week urging them to pass a bill by the end of the year.

"In the midst of the worst economic recession sine the Great Depression, the Commonwealth is in a global race of finite investment capital," the letter reads. "We must seize this opportunity to develop our abundant natural gas resources and win the economic prosperity and jobs that will result, or lose out to states and countries whose regulatory and tax environments make them more attractive for industry investment."

The groups said the final bill must standardize policies "without local variation or uneven enforcement," but allow local governments to have "relevant zoning powers."

They also believe any fee "must be competitive with fees in other shale gas producing states, reflective of well industry economics, transparent and predictable."

The letter was signed by the Pennsylvania Chamber of Business and Industry, the Pennsylvania Business Council, the Allegheny Conference for Community Development and the Greater Philadelphia Chamber of Commerce.

The Chesapeake Bay Foundation is making a similar call. Pennsylvania Executive Director Matthew Ehrhart, a member of the Marcellus Shale Advisory Commission that recommended a fee, issued a statement last week calling for quick passage, saying "the environment and our communities cannot afford any more delays."

"By blending the best parts of Senate Bill 1100 and House Bill 1950, the legislature has an historic opportunity to apply appropriate and meaningful bonding fees, establish a fair impact fee, secure funding to important programs like Growing Greener, and establish firm environmental laws that protect the health, safety and welfare of the Commonwealth's citizens," Ehrhart wrote, adding that any final bill should expand protections to smaller streams, guarantee the ability of state regulators to condition or deny permits, require best management practices, require erosion and sedimentation control inspection before drilling and allow regulators to deem some places to be "areas of high ecological value" that triggers permit conditions.

While local government groups reluctantly signed on to the bills after lawmakers backed away from provisions that would have completely preempted local authority, representatives from 40 communities in southwestern Pennsylvania are hosting a town hall meeting Tuesday night to protest the bills (see Shale Daily, Nov. 28).

The current bills require municipalities to allow drilling in all zones, but also allow local governments to impose conditions on development that apply to all industries equally, and let the state attorney general decide if a regulation is "reasonable."

"The only reason the industry plays by any of the rules now is because the local municipalities are there to set the standards and monitor their activities," the Marcellus Municipal Co-op, a collection of local government representatives, including some behind the town hall meeting, said in a statement on the provisions.

Meanwhile, a coalition of environmental and civic groups lead by Citizens for Pennsylvania's Future, also known as PennFuture, rallied outside the office of state Senate Majority Leader Dominic Pileggi on Monday to protest the legislation.

The impact fee legislation "is a direct attack on Pennsylvania's home towns and will destroy the ability of towns to protect residents from gas drilling and fracking," Maya van Rossum, of the Delaware Riverkeeper Network, said. "This basically puts the state and gas drillers in the driver's seat when it comes to local zoning and planning."

Legislative leaders are currently reconciling differences between the two bills, particularly the structure and administration of the fee. The Senate proposal would impose a statewide fee of $50,000 per unconventional well that decreases over 20 years, while the House measure would allow counties to decide whether or not to impose a $40,000 per unconventional well fee that decreases over 10 years.

The General Assembly is expected to adjourn Wednesday (see Shale Daily, Dec. 8).

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