While state senators in Pennsylvania continue to wrangle over an impact fee on natural gas drillers, the state House is moving quickly on a competing bill.

The House Finance Committee passed House Bill 1950 last Wednesday by a party line vote of 15 to 10. Republicans said the bill attempted to appease all sides in the matter, but Democrats called the fee inadequate and said 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 the nonpartisan but left-leaning Pennsylvania Budget and Policy Center, Mundy said 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 $40,000 fee 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 NGI, Oct. 10).

But unlike the Corbett proposal, House Bill 1950 would use some revenue from drilling on state land to fund statewide environmental. 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 continues to debate its impact fee and doesn’t expect to have legislation ready for a vote on the floor until mid-November. “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.

The Senate Appropriations Committee dropped the fee from its Senate Bill 1100 in late October to focus on passing increased environmental standards that garnered broader support among Republicans and Democrats (see NGI, Oct. 31). That bill originally included a fee structure similar to the Corbett proposal.

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