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Pennsylvania House Committee Passes Impact Fee

While state Senators in Pennsylvania continue to wrangle over a drilling impact fee, a state House committee passed a competing bill along party lines Wednesday.

The House Finance Committee passed House Bill 1950, introduced the day before by Rep. Brian Ellis of southwestern Pennsylvania, by a vote of 15 to 10. Democrats voted against the measure, calling the fee inadequate and saying the bill strips local governments of their ability to regulate drilling through zoning codes.

"Overall, this is a terrible bill," said Democratic Chair Rep. Phyllis Mundy.

Using calculations similar to those of the nonpartisan but left-leaning Pennsylvania Budget and Policy Center, Mundy noted that the bill would have a 1% effective tax rate, the lowest of any proposal, and collect $160,000 over the life of each well.

The bill mirrors a proposal by Gov. Tom Corbett, allowing counties to enact a fee up to $40,000 per well in the first year of production that drops to $10,000 for years four through 10. Like the Corbett proposal, it would keep 75% of the revenue at the local level and strengthen environmental standards (see Shale Daily, Oct. 4).

But unlike the Corbett proposal, House Bill 1950 would use some revenue from drilling on state land to fund statewide environmental and conservation programs. While that measure is intended to win over lawmakers from the population-heavy but shale-light southeastern corner of the state, Mundy said Democrats would prefer to have those statewide programs funded from the revenue collected from the fee.

"This puts pressure to do more drilling on public lands," she said.

Meanwhile, the state Senate doesn't expect to have impact fee legislation drafted and ready for a vote on the floor until mid-November (see Shale Daily, Nov. 2).

"Hopefully we're going to be able to get that bill moving out of appropriations and to the floor of the Senate for a final vote the week of Nov. 14," said state Senate President Pro Tempore Joe Scarnati, the Republican behind the Senate bill.

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