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Pennsylvania Governor Planning Impact Fee

Pennsylvania Gov. Tom Corbett said he would introduce an impact fee for Marcellus Shale producers this month.

Speaking on a Philadelphia radio program Thursday, Corbett offered few details about his plan but acknowledged that his administration is currently drafting a package of Marcellus legislation that includes a fee on natural gas operators to pay for impacts of development, such as damage to infrastructure caused by increased truck traffic.

While supporting an impact fee in principle for months, the announcement on the Dom Giordano Show, in a segment called "The Gov. Tom Corbett show," is the first indication that Corbett actually plans to propose legislation. The nature of the fee remains to be seen, but Corbett said most of the money would stay at the local level.

"The primary amount of money -- a huge amount of money -- will go to the counties, and the counties will work with the municipalities. What comes to the state, in my mind, will be used for, specifically, [the Pennsylvania Emergency Management Agency] and be used for an environmental clean-up, of some type," Corbett said.

While the Marcellus Shale Advisory Commission recommended a fee to cover local impacts, legislative leaders have said it will be hard to get votes from the Philadelphia area -- where there is no Marcellus activity -- unless the fee funds statewide programs. Corbett addressed that indirectly by saying, "Often times I hear people say, 'Well, what's in it for us in areas that do not have the Marcellus Shale?' First off, cheaper, affordable energy."

A staunch opponent of any tax increases, Corbett insisted that his proposal would not be "a tax to go to the General Fund of Pennsylvania" and reiterated his opposition to a severance tax on the grounds that "these industries are already paying taxes," such as the corporate income tax, and other state and local taxes.

"Now, is there an impact? Yes, there is," he said. "And we are working on legislation that we will be introducing." Corbett said his administration has already "preliminarily" met with legislative leaders about the proposal.

Pennsylvania citizens broadly favor a severance tax, according to recent polls. Despite warnings of a gubernatorial veto, Democrats in the state House of Representative continue to push for a tax (see Shale Daily, Sept. 13; Sept. 2).

Also unknown is what other proposals will be in the legislative "package" Corbett will send to lawmakers. The Marcellus Shale Advisory Commission made 96 policy recommendations ranging from pooling to setbacks, and department heads have requested detailed changes to existing laws (see Shale Daily, July 19; June 21; June 6).

When lawmakers return from their summer break on Monday, they will begin sorting through 15 severance tax and impact fee proposals introduced earlier this year. The bill with the most momentum going into the fall is an amended version of one introduced by Senate President Pro Tempore Joe Scarnati (see Shale Daily, June 15).

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