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Pennsylvania Groups: Break Up the Impact Fee

A coalition of environmental groups is calling on Pennsylvania lawmakers to take a new approach in their ongoing efforts to approve an impact fee on natural gas drilling in the state, either by starting the process over or dividing the omnibus legislation into four separate bills.

Citizens for Pennsylvania's Future (PennFuture) released a report Tuesday suggesting that the continuing delays come from a failed attempt by lawmakers to address too many issues at once.

The eight-page report suggests breaking the existing legislation into four parts: one enhancing environmental regulations, one imposing a severance tax, one enacting a moratorium on developing additional public lands and one creating a legacy fund from public revenues.

"By combining consideration of safety regulations, a drilling tax, restructuring the Oil and Gas Lease Fund and local government control issues, legislative leaders force their members to accept the lower common denominator on all these issues in order to get to a deal," the report said.

The PennFuture report followed an anti-drilling rally on the Capitol steps Tuesday led by a collection of environmental groups including PennEnvironment, Clean Water Action and the local Sierra Club chapter. The protesters held signs demanding that lawmakers "Kill the Bill."

The state Senate and House of Representatives approved competing impact fee proposals in November 2011, but couldn't a reach a compromise between the different bills (see Shale Daily, Nov. 18, 2011). The Senate eventually moved HB 1950 in mid-December -- on its final day in session for the year -- by replacing the original language with its own. The House voted those changes down on its final day before the winter recess (see Shale Daily, Dec. 21, 2011).

The state Senate is expected to vote soon to send HB 1950 to a conference committee, where members of both chambers and both parties will try to hammer out their differences.

The six-member committee would include three senators and three representatives, with two members of each chamber coming from the majority party and one each from the minority.

Although legislative leaders and Gov. Tom Corbett claimed to have spent their winter recess narrowing down the issues, there is a growing chorus for them to scrap the bill. PennFuture previously called for the General Assembly to "junk the whole thing and start over again."

Considering that a conference committee only needs four votes to pass a report and that both chambers are led by Republicans, the process appears difficult to hijack at this point, but the debate this year has revealed that region and ideology trump party lines when it comes to shale.

PennFuture noted that the upcoming state elections later this year, in recently redrawn state legislative districts, mean lawmakers are "paying closing attention to citizens -- and no issue has the citizens more engaged than deep natural gas drilling." It also noted that an attempt to significantly amend the legislation before the recess appeared to gain enough bipartisan support to pass, but failed because Senate leadership closed the vote during deliberations.

The protesters on the Capitol steps in particular called for lawmakers to remove controversial provisions in the bill that would restrict how local government can regulate shale development.

Those provisions, though, are among the few points of agreement among the three sides.

The primary differences between the two bills are the structure of the impact fee and the distribution of the revenue collected from it. Philosophically, the House wants a smaller fee, administered by counties and largely funding local programs, whereas the Senate wants a larger fee administered by the state and funding local and state programs somewhat equally.

If the committee can't reach a deal quickly, the process could significantly delay passage of legislation that Pennsylvania lawmakers have failed to move for three consecutive sessions.

And any efforts to change -- over overhaul -- the legislation now must contend with a goal to pass some bill before Gov. Tom Corbett gives his budget address in early February.

"I don't think that there is any reason that we should hold back any longer," Senate President Joe Scarnati, a Republican from shale-rich central Pennsylvania, told reporters in early January. "We know what our differences are, and there is going to have to be movement on both sides."

The budget address provides a natural deadline not only because it will kick off months of debates that typically tie up the first half of the year for lawmakers, but also because Pennsylvania is already projecting spending cuts in the face of another year of deficits.

Corbett recently froze $160 million in state spending to avoid a deficit this year.

While impact fee legislation continues to be a question mark, other shale-related legislation is gaining traction in Pennsylvania. Both the state House and Senate have passed Senate Bill 995, a bill requiring drilling companies to provide to state and local authorities detailed emergency contact information for all of their wells in the state (see Shale Daily, May 31, 2011). The bill is currently before Corbett, awaiting final approval.

And late last year Rep. Sandra Major, a Republican from prolific Susquehanna County, introduced House Bill 2087, a bill that would use 5% of the Oil and Gas Lease Fund, the holding place for revenue from development on public lands, for "conservation, recreation, dams or flooding control," or as a state match for federal grants made for any of those efforts.

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